Rating upgrades in Spain and Greece to lift sentiment

Friday, May 23, 2014

Asian equity markets finished higher, while the main focus remains on Thailand and on-going tensions in Ukraine. The Nikkei index climbed more than 120 points (+0.87%) and the Hang Seng extended gains by 0.10%, following recent robust PMI manufacturing data.

S&P raised Spain’s sovereign ratings to BBB from BBB- this morning. Fitch also increased Greece’s sovereign rating to B from B-, citing improving market conditions in the Greek economy.

This morning, the release of the German GDP showed the economy grew by 0.8% in Q1 2014, in line with analysts’ expectations. Investors will be keeping an eye on the release of the Ifo Business climate survey for further direction. We expect initial consolidation and further sideways trading activity in the European equity markets today as investors could remain cautious ahead of the Ukrainian and European election results.  

German GDP

GRGDPPGQ Index (Germany GDP Chai 2014-05-23 09-20-48

Currencies: The dollar hovered at one-week high against the yen and held its ground on the euro early, having drifted up broadly after optimistic US housing and manufacturing data gave Treasury yields a bit of a lift.

USDJPY

USDJPY Curncy (USD-JPY X-RATE)   2014-05-23 09-20-15

Oil: Brent front month futures held steady above $110 per barrel, set for a second straight week of gains, supported by tensions in Libya and Ukraine as well as by positive economic data in the world's top two oil consumers, the US and China.

Brent Front Month

CON4 Comdty (BRENT CRUDE FUTR  J 2014-05-23 09-21-24

Events for today:

 

0700

DE

Q1

GDP

0900

DE

Oct

IFO - Current Assessment

0900

DE

Oct

IFO - Business Climate

1500

US

Apr

New Homes Sales

 

All times UK Local Time

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