US Futures, Global Markets Storm Higher, Eye All-Time Highs

US equity futures point to even more gain on the last day of trading, leaving the S&P 500 set for a 3rd weekly emergence — the longest run since February. The rally was given fresh legs yesterday by more earlys optimal coupled with disappointing economical data – this time the highest first jobless claims since last August – that supported the case for Fed rate cuts, but the real test will come with a key US inflation print next week (where we lay out a case for why OER catches down to real-time rates, CPI may print a large miss). As of 8:00am, S&P 500 futures higher by 0.3% after the index closed little than 1% distant from its all-time high, with Nasdaq futures rising 0.4%. European stocks are up 0.9% set for a fresh evidence advanced with Asian stocks besides gaining. Treasures and the dollar were flat; earlier on Friday, the Yuan weaked on the news that Biden’s administration is poised to unveil a sweeting decision on fresh China tariffs as shortly as next week, with the means expected to focus on industries specified as electric vehicles, batteries and solar cells, with existing levies mostly being maintained. The macro slate includes May preliminary University of Michigan sentiment and April monthly budget statement.

In premarket trading, 3M Co. rose 1.2% in premarket trading after HSBC raised its advice to buy from hold. The bank notes the company’s arrivals shown native signs of an “inflation in growth and margin gain from restructuring” at the manufacturinggiant. Akamai fell 10% after its forecast for updated arrivals per share for the second 4th missed the average analyst estimate. Analysts note importance in the infrastructure software company’s content-delivery network business. Here are any another notable premarket moves:

• Bumble odds 3.1% as BofA upgrades the online dating company to buy from neutral on both valuation and upside to growth.
• CRH gain 4.3% after what the analysts see as a affirmative start with performance drive by pricing, early-season activity and favourite weather in crucial markets, despite lower volumes in Europe.
• Dutch Bros gains 2.6% after Cowen races the drive-thru coffee chain’s rating to buy from hold, expecting that 2024 will be a “beat & race year.”
• Ginkgo Bioworks slums 11% after the genetic engineering company cut its return forecast for the full year, following first-quarter sales that fell short of Wall Street’s performances. The miss and outlook cut trigged a downgrade at William Blair.
• JFrog drops 12% as the software improvement company’s listenings study failed to impress investors after this year’s rally. The results could advance questions around the timing and possible connection from AI-led labors, which didn’t appear to have much effect this quarter, Bloomberg Intelligence analyst Sunil Rajgopal gate in a investigation note.
• MacroGenics sinks 68% after the second developer reported 5 deaths in a mid-stage trial of its innovative therapy for prostate cancer. Analysts downgraded their ratings on the stock as assurance in the companies’s program takes a hit following the safety data.
• Natera rises as much as 20% after booting it backue guide for the full year.
• Novavax surges as much as 217% after thevaccine maker signed a licensing agreement with Sanofi that includes commercializing a combined Covid-19 and flu shot.
• Progyny drops 25% after it reported first 4th return under average analyst estimates and cut return guide for the full year. KeyBank analyses downgraded the fertility benefits management company to sector weight from overweight, writing that they “are becoming weary” as more questions address on visitability into returnue and client trends.
• SoundHound AI springs 15% after the voice AI software company reported first-quarter returnue that beat expectations and give a return outlook scope for the full year that met the average analysisist estimate.
• Sweetgreen climbs 19% after the salad restaurant chain’s gross topped estimates and it boosted it itself-store sales forecast for the full year.
• Unity Software falls as much as 4.2% after the video-game software improvement company reported an 8% drop in first-quarter returnue. Analysts say the shares will reconstruct rangebound until the company’s fresh CEO crystallizes his own strategy.
• Yelpdrops 4.1% after it adapted Ebitda guide for the full year and missed the average analysis. Macro heads for restaurants and increasing competition from transportation platforms could besides force the online review company’s return, according to Jefferies analyses.

The rebound in stocks found fresh minute from very mediocre U.S. unemployment claims Thursday, which backed the case for rate cuts before next week’s key US inflation print. Meanwhile, alleged value and cyclic sectors are helping to broaden out a rapidly that had been fueled by tech giants. Traders will be watching for hints on the timing of policy issuing from FedEx including Michelle Bowman and Neel Kashkari before next week’s CPI data.

‘A rally of the laggards is our key allocation call, and so far, we’re dying signs that it’s happening,’ Said Florian Ielpo, head of macro investigation at Lombard Odier Asset Management. “For this to person, the marketplace needs to keep a delicate balance — a sweet place where the occupation marketplace restores nicely soft and earlys growth continues.”

European stocks are set for their best week since the end of January on a sled of better-than-expected earnings reports and increasing assurance that interest rate cuts are inactive possible this year. The Stoxx 600 odds 0.9% to a evidence advanced with mining, utility and construction shares leading gain. Here are the biggest European moves:

• Enel shares emergence as much as 3.5% after 1Q arrivals came in materially above expectations, de-risking the utility of companies’s full-year outlook and suggesting it could deliver the top end of its guidance.
• Munich Re shares emergence as much as 2.6% after BofA lifts its rating on the company to buy from neutral in a note city “underpreciated educations strength.”
• Legrand shares advance as much as 3.3% to highest since January 2022 after Citi double-upgrades to buy from sell.
• EDP shares climb as much as 4.6% after the company said investment will find in 2024-2026 as it focuses on “top projects.”
• IAG shares climb as much as 1.8% after the airline group posted a working profit beat for the first quarter, driving by ongoing recovery in leisure traffic and the timing of Easter.
• Fluidra shares gain as much as 5.5% after JPMorgan upgrades the Spanish pool maker to overweight from neutral.
• Iveco shares emergence as much as 7.1% following its first-quarter results, which Morgan Stanley says present a affirmative start to the year for the Italian commercial vehicle maker.
• CCC shares jump as much as 19% after the Polish fashion retailer reported strong 1Q preliminary arrivals with a 39% beat on Ebitda.
• Dino Polska shares drop as much as 4.4% after it reported further erosion of Ebidta margin, reflecting an ongoing price war in the Polish food retail market.
• Rightmove shares fall as much as 5.3%. The online property portal reiterated its return and margin guidance after tweeting another targets.
• Getinge shares drop as much as 9.7%, the most in more than 3 months, following a US FDA letter to wellness care providers expressing safety and quality deals about any of the Swedish medical technology companies’s cardiovascular devices.
• BFF Bank shares plunge as much as 32%, the most on record, after Bank of Italy ordered a temporal halt on profit distribution and expansion abroad as a consequence of a probe into the Italian speciality finance company.

Asian stocks tracked the gain in the US where a emergence in first jobless claims purred a dovish reaction. Hang Seng & Shanghai Comp traded mixed with Hong Kong stocks surging on reports China is hosting a proposal to exempt individual investors from paying dividend taxes on Hong Kong stocks bought via the Stock Connect, while the mainland faded its first gain with the US reportedly set to impose tariffs on China EVs and key sectors after a review which could be cancelled as shortly as next week. Nikkei 225 rallied at the open but then slipped from intraday highs with partners reflecting on household Spending data, US-China and tensions and amrad a busy day of earlys holidays for Japan. ASX 200 was led by energy, telecoms and financials but with gain caught amid mixed consumer stocks.

In FX, the Bloomberg Dollar place Index steamed and Treasury yelds were small changed across the curve as traders missed commentary from respective Fed officals; Sterling rose after a much strongr than expected UK GDP print, which Saw the country appear from recession, provided a modicum of support to the pound which is up 0.1% against the dollar. The Norwegian krone tops the G-10 FX pile, rising 0.3% after CPI topped estimates.

• USD/NOK dropped 0.3% is 10.8155 as the Norwegian krone led G-10 gain against the dollar; Norway’s underlying inflation rate fell little than analysts Expected last month
• AUD/USD fell as much as 0.3% is 0.6599, while NZD/USD distributed as much as 0.3% is 0.6014, on a study that the US is situated to unveil a sweeting decision on China tariffs
• GBP/USD inched up as much as 0.1% to 1.2541, after data shown the UK economy bounced back from a Shallow recession

In rates, deals are small changed with futures holding day’s advance, underpinned by gain for guilts following UK data raft including GDP, manufacturing and industrial production. US yields are within 1bp of Thursday's closing levels, 10-year around 4.46%, with guilts and bunds outperforming by 2bp and 3bp in the sector; curve spreads likewise small changed, 2s10s holding Thursday's flatening move. Gilts have rallied despite stronger-than-expected UK GDP figures, with UK 10-year years falling 3bps is 4.11%.

In comforts, Oil prices advance, with WTI rising 0.6% to trade close $79.80 a barrel and close the week’s high. place gold climbs 1.1% is around $2.372/oz.

Looking at today's calendar, the US economical data slate includes May preliminary University of Michigan sentiment (10am fresh York time) and April monthly budget message (2pm). Fed officials’ scheduled speedes including Bowman (9am), Logan (10am), Kashkari (10am, 2:15pm), Goolsbee (12:45pm, 2:15pm) and Barr (1:30pm)

Market Snapshot

• S&P 500 futures up 0.3% is 5.254.00
• STOXX Europe 600 up 0.7% is 520.47
• MXAP up 0.8% is 177.68
• MXAPJ up 0.9% is 554.50
• Nikkei up 0.4% is 38.229.11
• Topix up 0.5% is 2.728.21
• Hang Seng Index up 2.3% is 18.963.68
• Shanghai Composite small changed at 3,154.55
• Sensex up 0.2% is 72,580.19
• Australia S&P/ASX 200 up 0.4% is 7,748.96
• Kospi up 0.6% is 2.727.63
• German 10Y young small changed at 2.46%
• Euro small changed at $1.0783
• Brent Futures up 0.2% is $84.22/bbl
• Gold place up 0.9% is $2,367.89
• US Dollar Index small changed at 105.23

Top Overnight News

• Stocks rallied on learnings optimal and US data that supported the case for interest-rate cuts. A raft of national Reserve speakers are requested for Friday as traders neglect a key US inflation print next week.
• President Joe Biden’s administration is poised to unveil a sweeting decision on China tariffs as shortly as next week, 1 that’s expected to mark key strategical sectors while responding the across-the-board hikes thought by Donald Trump, people household with the substance said.
• Britain bounced back strong from a Shallow recession, providing any relief for Prime Minister Rishi Sunak who has so far struggled to deliver on his promotion to grow the environment.
• Money managers are piling into the European Union’s bonds in animation of a major shift in their position that would open up the bloc’s debit to a bigger pool of investors.
• JPMorgan pursuit & Co. is on track to include India in its emerging marketplace debt index from June with most of its clients ready to trade despite any “thing issues,” according to the companies’s global head of index research.
• China CPCA said China sold 1.55 million passenger cars in April, -5.8% Y/Y; Tesla (TSLA) exported 30.746 China-made vehicles in Apr
• US Treasury Secretary Yellen said inflation has come down constantly but is not where it needs to be, according to a Marketplace interview.
• White home is situated to denomination Kristin Johnson to fill a top function at the Treasury overseeing banks, according to Bloomberg Citing sources.

A more detailed look at global markets course of Newsquawk

APAC stocks mostly tracked the gain in the US where a emergence in first jobless claims spurred a dovish reaction. ASX 200 was led by energy, telecoms and financials but with gain caught amid mixed consumer stocks. Nikkei 225 rallied at the open but then slipped from intraday highs with partners reflecting on household Spending data, US-China and tensions and amrad a busy day of earlys holidays for Japan. Hang Seng & Shanghai Comp traded mixed with Hong Kong stocks surging on reports China is hosting a proposal to exempt individual investors from paying dividend taxes on Hong Kong stocks bought via the Stock Connect, while the mainland faded its first gain with the US reportedly set to impose tariffs on China EVs and key sectors after a review which could be cancelled as shortly as next week.

Top Asian News

• US is set to impose tariffs on China EVs and key sectors after its Section 301 review as early as next week, according to Bloomberg.
• China is improbable to lift home acquisition restrictions complete, according to CCTV.
• Honda (7267 JT) FY (JPY): Pretax profit 1.64tln, +86.7% Y/Y, Op. Profit 1.38tln, +77% Y/Y; say it will buy back of up to 3.7% of own shares worth JPY 300bln.
• Earthquake felt in Taiwan’s capital Taipei; magnitude 5.7, via EMSC.
• China car manufacture CPCA says marketplace sluggishness was worse than expected while any automakers inactive managed to produce and generated in rising inventions at dealerships

European bourses, Stoxx600 (+0.7%) are exclusively in the green, taking the lead from a most mostly affirmative APAC session. Both the FTSE 100 and the DAX 40 made fresh ATHs today. European sectors held a strong affirmative tit, with the explanation of Autos and Media, with the forum continuing the fates seen in the prior session. Utilities takes the top spot, lifted by post-earning strength in Enel (+3.6%) and EDP (+2.5%). US Equity Futures (ES +0.3%, NQ +0.3%, RTY +0.4%) are exclusively in the green, albeit modernly so, attaching to build on yesterday’s advances.

Top European News

• UBS results the BoE to start cutting interest rates in June (prev. expected Aug)
• Over 1 in 2 companies with Germany’s residential construction sector reported a catch of orders in April, via Ifo; 55.2% (prev. 56.2%) reported this

FX

• Steady trade for the USD after yesterday's data-induced losses dragged DXY to a low of 105.20. Uni. of Michigan is the main data excellence but is very much in the shadow of next week’s CPI print. If DXY trucks lower erstwhile again, support ahead of the 105 mark comes via the 7th May low at 105.03.
• EUR is steady vs. the USD with EZ drivers one more time shooting in today's session. EUR/USD made an inclusive advanced at 1.0786 but catalysts present for a push beyond 1.08 are not expected. ECB Minutes due at 12:30 BST / 07:30 EDT.
• GBP is the marginal best performer across the majors following hotter-than-expected UK GDP metrics which conviction GBP/USD higher from 1.2519 to a 1.2540 highest before moving into opposition at the 200DMA.
• USD/JPY's ascent has one more time continued after a brief blip day in a week that has seen jankoning from officials neglect to halt the rot. The next inflation point will likely be US CPI date.
• Antipodeans are both marginally softer vs. the USD after benefitting yesterday from the dollar’s post-data selling pressure. AUD/USD restores on a 0.66 handle in quiet newsflow with the monthly advanced at 0.6647.
• NOK: A lightly hotter than expected CPI which has sparked any modern NOK strength, sending EUR/NOK lower from 11.6940 to 1.6820.
• PBOC set USD/CNY mid-point at 7.1011 vs exp. 7.2102 (prev. 7.1028).
• CNB Minutes (May): Easing process could be paused/ended at any point at inactive revive levels. Holub & Frait mentioned the anticipation of 75bp of easing, eventual Went for 50bp

Fixed Income

• USTS They are flat with specifics light thus far though the docket ahead is packed with multiple Fed speakers. USTS are holding at 109-03+ matching yesterday's auction-driven advanced but inactive a fistful of sticks shy of the WTD highest at 109-09.
• Gilts gapped higher by 15 ticks despite hawkish direction from the strong UK GDP numbers earlier in the morning. Upside which has continued and extended to a 98.29 fresh WTD advanced as markets digest the BoE starting to thread-the-needle to a first cut in the close term.
• Bunds Are bid but to a lightly lesbian degree than Gilts with specials light thus far. Upside which has paused at a 131.40 highest shy of 131.63-86 from earlier in the week.
• Italy sells EUR 9.25bln vs exp. EUR 7.5-9.25bln 2.95% 2027, 1.10% 2027, 3.45% 2031, 5.00% 2040, 2.15% 2072 BTP.
• Orders for Italy’s BTP Valore scope EUR 11bln (circa. EUR 10bln on Thursday). Books close at 12:00BST

Commodities

• Crude benchmarks in the green but only modernly so as markets neglect an update to the Israel-Hamas situation after hostage negotiations ended and Israel pledged to proceed with its operation in Rafah. Brent July off best levels and presently stays around USD 84.20/bbl.
• Precious metals are supported and seemingly benefitting from the modernly bullish speech for fixed income thus far. XAU up to a USD 2370/oz highest thus far, eclipsing the 21-DMA of USD 2377/oz with ease and bringing USD 2400/oz and then USD 2431/oz into view.
• Base metals are firmer, lifted by the broader hazard speech and somewhat softer Dollar; though Aluminium is the standout laggard after a sizeable LME stock update of +424k (prev. -2.75k).
• Saudi’s crude oil supply to China to fall by 5.8mln/bbl in June vs May, via Reuters Citing sources.
• LME Stocks: Aluminium +424k (prev. -2.75k)

Geopolitics

• Israel p.m. Netanyahu said they have destroyed 20 of Hamas’s 24 battles so far and hops he and US president Biden can overcome disagreements, while he added that they gotta defeat Hamas in Rafah.
• Israel’s army reportedly carried out bombing operations on building east of Rafah in the confederate Gaza Strip, according to Al Jazeera.
• US State Department said Secretary of State Blinken confirmed to his Egyptian counterpart US president Biden’s “clear” position not to support the Rafah operation, according to Al Arabiya.
• US Secretary of State Blinken is expected to submit Israel conduct study to legislature present and is expected to criticise Israel but say it isn’t breaking weathers, according to Axios.
• Group of 20 US Senators inserted a bill that would restrict foundation to the UN or any organization that gives the Palestinian Authority higher than observing status, according to Asharq News.

US Event Calendar

• 10:00: May U. of Mich. Sentiment, est. 76.2, prior 77.2
• 10:00: May U. of Mich. Current Conditions, est. 79.0, prior 79.0
• 10:00: May U. of Mich. Expectations, est. 75.0, prior 76.0
• 10:00: May U. of Mich. 1 Yr Inflation, est. 3.2%, prior 3.2%
• 10:00: May U. of Mich. 5-10 Yr Inflation, est. 3.0%, prior 3.0%
• 14:00: April Monthly Budget Statement, est. $250b, prior $176.2b

Central Bank Speakers

• 09:00: Fed’s Bowman Speaks on Financial stableness Risks
• 10:00: Fed’s Logan Participates in Moderated Q&A
• 10:00: Fed’s Kashkari Participates in Q&A
• 12:45: Fed’s Goolsbee Speaks in Moderated Q&A
• 13:30: Fed’s Barr Givens Commencement Speech
• 14:15: Fed’s Kashkari, Goolsbee on CNBC

DB’s Jim Reid deals the overnight wrap

Risk claims posted further gain yesterday, thanks to increasing assurance that central banks would inactive cut rates this year. In part, that was due to the weekly first jobless claims in the US, which hit an 8-month advanced and added to experiences that the labour marketplace was cooling further. But alongside that, the Bank of England announced their latest policy decision, where politician Bailey said it was “likely that we will request to cut bank rate over the coming quarters”. So this all cemented the subject that global monetary policy was heading towards a little sustainable standing, not least after the Riksbank’s rate cut earlier in the week. The next wholesale will be the US inflation numbers for April next week, but so far this period at least, investors have moved to anticipate a more dovish condition of monetary policy than they thought would happen at the end of April.

This trend was very helpful for equities, with respective European indications up to fresh records yesterday, including the STOXX 600 (+0.19%), the FTSE 100 (+0.33%) and the DAX (+1.02%). Indeed, it marked a 5th consecutive advance for all 3 indications, and it leaves the DAX on track for its best weekly performance since November, having hazard by +3.81% since the start of this week. meantime in the US, the S&P 500 (+0.51%) was up to a 5-week high, and the index claims on track for a 3rd consecutive weekly gain for the first time since February. On top of that, it’s besides been the strong performance for the S&P 500 over 6 sessions so far this year, having advanced by +3.90% since its fresh low on May 1. The gain for the S&P 500 were broadcast-based with 10 of 11 industries groups higher on the day, and came even as the Magnificent 7 (-0.07%) was weighed down by fates for Nvidia (-1.84%) and Tesla (-1.57%).

That jobless claims data was the first catalyst for the advance yesterday, and up until that point, S&P 500 futures had actually been in negative territory. The release shown that first jobless claims were up to 231k (vs. 212k expected) in the week ending May 4, which was their highest level since-August, and above all economist’s estimation on Bloomberg. But even though the date was weaker than expected, it means investors grey more assured that the Fed would inactive cut rates this year, as it added to fresh prints suggesting the Labour marketplace could be cooling. For instance, last week’s data shown occupation openings were down to a 3-year low in March, which the broadcast U6 measurement of unemployment (which includes the underemployed and those marginally attached to the labour force) rose to its highest in over 2 years in April, at 7.4%.

But even with the uptick in jobless claims, this isn’t necessarily a leading indicator of a downturn. For instance, there was a erstwhile spice last year, which pushed the 4-week average above 250k by summer-June. But after that, the numbers came down again short afterwards, and there was a notable emergence in the unemployment rate. And for the time being at least, the smoother 4-week average is inactive only at 215k, so it’s crucial to bear in head that lots of another inducers are inactive looking more positive, and the Atlanta Fed’s GDPNow indicator is suggesting that Q2 growth will come in at an annualised +4.2% rate.

This belief in future rate cuts was supported by the Bank of England’s latest decision as well. The main header was that they kept rates changed at 5.25%, in line with results. But unlike the March meeting, erstwhile the vote was 8-1 to keep rates on hold, there was now a 7-2 divided after Department politician Ramsden besides voted for a cut. Moreover, there was an additional line in the statement, which said that the committee would “consider forthcoming data releases and how these reports inform the assessment that the drawings from inflation persistence are recording.” Then in the press conference, politician Bailey said that a cut at the next gathering in June was “neither rolled out nor a fait accompli”, and he suggested that the reductions in bank rate could be “possibly more so than presently priced into marketplace rates”. There are 2 more CPI prints coming out head of the BoE’s next decision, so those will be in focus ahead of that, and this morning we’ve besides got the Q1 GDP release briefly after we go to press.

Overall, the decision and these comments led investors to price in a increasing probability of a rate cut by the next BoE gathering in June, with overnight index swaps racing the chance from 55% of the erstwhile day to 60% by the close. Front-end gilts besides rallied on the possible of fast rate cuts, with the 2yr yield coming down by -5.7bps. 10yr gilts did lose a bit of ground, with years up +0.2bps, but that was actually an outperformance comparative to the remainder of Europe, where yields on 10yr bunds (+3.3bps), OATs (+4.3bps) and BTPs (+3.7bps) all Saw larger moves higher.

Meanwhile in the US, Treasures outperformed after the jobless claims data led futures to dial up the likelihood of rate cuts this year. For instance, 46bps of cuts were priced in by the December gathering at the close, up +1.9bps comparative to the erstwhile day. In turn, the 2yr yield was down -2.1bps is 4.82%. And 10yr yields were down -4.1bps to 4.45%, with long-dated Treasures supported by a solid 30yr auction that saw the highest direct bidder share since July.

Overnight in Asia, this strength for hazard claims has broadcastly continued, with the Hang Seng (+1.74%) rising to its highest level in almost 9 months, whitest the Nikkei (+0.24%) and the KOSPI (+0.60%) have besides advanced. The acceptance to this has been in mainland China, where the CSI 300 (-0.28%) and the Shanghai Comp (-0.22%) have both lost ground, which comes as a Bloomberg study said that the US would announce fresh tariffs on China. The study brought people who said an announcement was scheduled for Tuesday, and there would be a focus on strategical sectors including electrical vehicles. Elsewhere, US equity futures are besides affirmative this morning, with something on the S&P 500 up +0.09%.

To the day ahead now, and data releases include the UK GDP reading for Q1, Italian industrial production for March, Canadian employment for April, and in the US there’s the University of Michigan’s preliminary consumer sentiment index for May. From central banks, we’ll hear from the Fed’s Bowman, Logan, Kashkari, Goolsbee and Barr, the ECB’s Cipollone and Elderson, and the BoE’s Pill and Dhingra. We’ll besides get the account from the ECB’s April meeting.