Overnight Headlines and Three Items for the Day Ahead

Market strategists at Nomura, including Pooja Kumra, highlighted the following three headlines overnight and said investors should keep they eye on these four items for the day ahead:

Headlines

• Euro area: Q1 Spanish GDP (2nd estimate) came in at 0.4% q-o-q (Nomura: 0.4%; Previous: 0.4%).
• Korea: The current account surplus narrowed to USD7.1bn in April from USD7.3bn in March.
• Philippines: GDP growth slowed to 5.7% y-o-y in Q1 from 6.3% in Q4, disappointing expectations (Consensus: 6.4%; Nomura: 6.2%).

The Day Ahead

US Initial jobless claims: Initial jobless claims have been volatile for the past month because of the Easter holiday. Nevertheless, the downtrend in claims points to an improvement in the underlying labour market trend. Consensus expects 318k initial claims for the week ending 24 May (Previous: 326k).

US Q1 GDP, second estimate: Since the first estimate of Q1 GDP, data on nonresidential fixed investment, net trade, government spending, and the change in private inventories have been weaker than the BEA‟s assumptions. We forecast that the BEA will report that Q1 GDP declined by 0.8% (Consensus: -0.5%), compared with its original estimate of a 0.1% increase.

US Pending home sales: The pending home sales index tends to lead existing home sales by a couple of months. This index declined for eight-straight months ending February as the low inventory of homes, less buying, unfavourable credit conditions and recently, adverse weather conditions, have held back transactions in the housing market. Consensus expects the index to increase by 1.0% in April after it rose by 3.4% in March.

You May Also Be Interested In

• Doncasters (DPC) indicating open around $40, IPO priced at $33
• New Home Sales (May) 580K vs 640K Expected
• S&P 500, Nasdaq drop as tech megacap declines outweigh upbeat Micron forecast