Global data recap: the nasty, the disappointing and the better - ANZ

Analysts at ANZ broke down the data from overnight.

Key Quotes:

The nasty:  Euro area core inflation dropped to 0.7% y/y in April. Services inflation – which accounts for 44% of the index – slid 0.5%pts to 1.0% y/y. Discounting on package holidays, accommodation services and transport for the Easter period have been blamed as the main cause of softness, as it goes against the trend from the last six months. Nevertheless, average core inflation has been just 0.9% for the first four months of 2018, which is well below the ECB’s 2018 forecast of 1.2%. If growth rebounds as expected, it is probable that the ECB will go ahead with tapering QE in Q4. But how long will rates stay low past the end of QE? For now that is the big question.

The disappointing: UK April services PMI and composite both rose, but were below expectations. The data suggest that the economy may be stabilising at the start of Q2. Against that backdrop, the Brexit politics and the local elections (early results expected during Asian session), GBP should remain heavy. The US ISM non-manufacturing index also fell to 56.8. New orders increased, but business activity fell. Employment (53.6) dropped to its lowest in a year. However, initial jobless claims continued to trend lower and continuing claims are at the lowest level since the mid-1970s.

The better: US March trade deficit narrowed to USD49bn as exports rose 2.0% m/m and imports fell 1.8%. It was the smallest deficit since September 2017. Exports of goods and services were the highest on record and forward looking indicators suggest further growth yet. The deficit with China fell to USD25.8bn and was relatively flat, while the EU deficit sat at USD14bn."