Daily Market Color 05/29/2013

Daily Market Color

05/29/2013

Economic Reports & Headlines

Germany kicked off today’s economic calendar at 3:55am New York time. Their jobless rate in May stood the same at 6.9%. Although the jobless rate remained the same, joblessness still rose 21,000 in May.

UK’s retail and wholesale sector was in peril for the month of May according to CBI’s Distributive Trade Report. The headline figure missed consensus by a wide margin, -11 Vs 6.

Consumer prices in Germany rose slightly higher than consensus in May on a month over month basis, 40bps Vs 30bps.

IMF cut China’s growth forecast for the remainder of the year from 8.00% to 7.75%

  

Future Reports

Tomorrow we have a busy day on the global economic calendar. On the domestic front, the US will release first quarter GDP and jobless claims.

Japan will be releasing the following reports: Consumer Price Index, Household Spending, Jobless Rate and Industrial Production.

           

Trade

Tomorrow should be a volatile day for risk assets. US first quarter GDP is expected to come in at 2.5% on a quarterly basis. In light of the strong rise in stocks and the overly buoyant housing market, I’m forecasting a good GDP report for tomorrow. Over in Japan, the consumer price report is the report everyone will be watching, well everyone who trades Japanese markets will be watching this report. In light of the decline in energy prices, I’m expecting consumer prices to match consensus and decline 40bps. According to headlines in financial publications, markets participants are becoming increasingly cautious of risk assets because of potential fed tapering within the near future. At the moment, the FOMC do not have enough members in favor of voting for tapering to even make the threat of tapering a reality, at least for the moment.  

I will continue to be long US stocks and short Yen against the US dollar. The trade continues, but it could come to an end this week if Thursday’s reports disappoint by a wide margin.