European Stocks Consolidate Ahead of ECB Meeting

European stock markets are mostly slightly down. The CAC 40 is the notable exception and managing to hold on to a 0.10% gain, but the DAX has lost -0.05% and the FTSE 100 is down -0.10%, although in particularly the DAX remains at very high levels. Italian and Spanish markets are underperforming ahead of tomorrow’s ECB meeting, as the French election not just brings more political stability, but also puts pressure on Draghi and Co to change the forward guidance and lay the ground for tapering. Losses are relatively muted though and elsewhere the stock market rally continued with the Nikkei closing with a 1.10% gain, helped by a weaker yen. Other Asian markets also moved higher as hopes of Trump tax cuts boosts risk appetite. WTI meanwhile is little changed on the day and trading at USD 49.50 per barrel.

There was little hard data on the European continent to move the markets on Wednesday. French consumer confidence steady in April, with the overall reading unchanged at 100. Future expectations for the unemployment outlook improved markedly, but despite this the readings for the personal financial situation and purchasing opportunities fell back slightly. Overall though French confidence indicators have been positive and confirm that the French economy is catching up, with PMIs even suggesting that the pace of expansion is exceeding that in Germany.

Australian CPI Grew in Q1

Australia’s CPI grew 0.5% in Q1 quarter over quarter at the same rate as Q4 and missing expectations of a 0.6% increase. CPI did accelerate to a 2.1% year over year pace in Q1 from the 1.5% year over year rate in Q4. But that too was a touch below projections, but does regardless lift the annual rate above 2.0%. The annual core CPI measures improved: the trimmed mean CPI accelerated to a 1.9% year over year clip in Q1 from 1.6%, while the weighted median CPI picked up to a 1.7% rate from a revised 1.4% growth rate in Q4 (was +1.5%). Notably, the trimmed mean is nearing the bottom of the RBA’s 2.0% to 3.0% target band. The report underpins expectations for steady rates from the RBA through the turn of the year.

Crude oil prices whipsawed in the wake of the API report. The American Petroleum Institute estimates that crude oil inventories increased by 897,000 barrels compared to analyst expectations that markets would see a crude oil draw of 1.6 million barrels. Additionally, the API said that gasoline inventories increased by 4.4-million-barrels following last week’s build of 1.374 million barrels, while analysts were expecting a 2.2-million-barrel draw for the fuel instead.