Daily Market Color 05/05/2015

Daily Market Color
05/05/2015

Economic Reports & Headlines
The global economic calendar starts off in Australia with the country’s central bank monetary policy announcement. The Reserve Bank of Australia cut its key interest rate by 25 basis points to 2.0%. The rate cut was expected unlike the rate cut in February 2015.

In the UK we got a read on the country’s construction activity through Markit’s PMI Construction report for April. The report showed an expansion that came in below consensus: 54.2 vs. exp. 57.4. According to Econoday.com this is the weakest out turn since July 2013 and it was most likely due to shortages in supplies.

Eurostat’s Produce Price Index for March came in lower than expected on a month over month basis: 20bps vs. exp. 30bps. On a year over year basis, prices declined 2.3%. Cyprus, Latvia and Italy posted month over month declines. Ireland, Belgium and Spain posted month over month increases. Only one country, Luxemburg, posted an annual increase.

On the domestic front, the US trade deficit for March came above analysts’ expectations: $51.4bn vs. exp. 42.0bn. This is the largest deficit since October 2008. The unexpected increase was attributed to the West Coast port strike.

April’s PMI services report barely missed consensus: 57.4 vs. exp. 57.7. Nevertheless, this was a strong reading for the month of April.

The Institute of Supply Management expanded more than expected in April: 57.8 vs. exp. 56.5.

The European Commission increased its 2015 GDP forecast for the 19 nation currency bloc to 1.5% from 1.3%.

Greece is set to make a 200mln euro payment to the IMF tomorrow, 05/06.

Trades
I am waiting for a bailout deal to be reached or a default in Greece to buy or sell European stocks.