European, US Stocks In Eerie Calm As French Vote Looms

In commodities, some modest respite for the reflation trade gave base metals a modest fillip yesterday following comments from Trump's administration over healthcare and tax reform. Copper gains have stalled north of USD2.55, but we continue to hold off USD2.50 as tight range looks set to extend into the weekend as traders all focus on the French elections, and broader risk sentiment as a result. Price action looks to be uniform across the field this morning, but Copper outperforms modestly. Precious metals have based out, with little fresh weakness to note despite a small pick up in UST yields. Naturally the risk factor dominates for now, keeping Gold above USD1280.00, but Silver has since slipped below USD18.00. WTI is back under USD51.00 again, but ahead of fresh OPEC talks which will focus on a potential extension to production cuts, we should expect some near term 'noise' to play out.

Looking at the day ahead, the focus in the morning session in Europe will almost certainly be the release of the flash April PMIs. Market consensus is for the composite Euro area reading to hold steady at 56.3, with the final print coming in stronger at 56.7 Away from that, this morning we will also get UK retail sales data for March. Over in the US this afternoon the flash PMIs will also be released alongside March existing home sales data. Away from the data, the Fed’s Kashkari is due to speak this afternoon while the BoE’s Saunders is also scheduled to speak. Also of note is the start of the spring meetings of the World Bank Group and IMF which will continue into the  weekend. Lagarde and Mnuchin are amongst the scheduled speakers. Earnings wise today its quiet with just 9 S&P 500 companies reporting including Schlumberger and General Electric.

US Event Calendar

  • 9:45am: Markit US Manufacturing PMI, est. 53.8, prior 53.3; Services PMI, est. 53.2, prior 52.8; Composite PMI, prior 53

  • 10am: Existing Home Sales, est. 5.6m, prior 5.48m; MoM, est. 2.19%, prior -3.7%

DB's Jim Reid concludes the overnight wrap

The long awaited French Presidential Election is now nearly upon us with the first round taking place this Sunday. Speaking to our expert Marc De-Muizon yesterday he informed me that we'll likely get exit polls soon after polls close at 7pm local time (8pm BST) with any delays caused by the fact that a few stations are open for an extra hour. It's also possible we'll get some earlier exit polls from across the border during the afternoon as they'll be banned in France while polls are open. Marc thinks that the only way we won't have a good idea of the rankings of the leading candidates within an hour or two is if all four main protagonists are clustered around the same mark. Quite possible.

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