European Stocks Slip as Investors Take Profits Following Macron Victory

European stock markets are mostly heading south. The FTSE 100 is outperforming and managing to hold on to a 0.04% gain, but in the Eurozone investors are taking profit after the Macron rally last Friday. In fact, the French CAC 40, which outperformed Friday is now underperforming and down -0.86% and the DAX has fallen back below the 12700, which it managed to clear for the first time ever on Friday. German orders data at the start of the session may have been strong, but that only underpinned the obvious change in direction at the ECB, with even Executive Board member Mersch suggesting that it may be time to discuss exit steps. The Euro Stoxx 50 is now down -0.51%. Sentiment was still upbeat in Asia overnight and the Nikkei closed with a 2.3% gain after returning from a 3-day holiday. Robust jobs data out of the U.S. underpinned hopes for a strengthening of the global economy, while the French election result reduced political risk. China underperformed again as the focus remains on government efforts to curb leverage. and following disappointing trade data. U.S. stock futures are also heading south and oil prices are down with WTI just barely above USD 46 per barrel.

German manufacturing orders rise 1.0% month over month in March, while February data was revised up to 3.5% month over month from 3.4% month over month reported initially. The number is broadly in line with consensus and the breakdown showed that a rebound in foreign orders inflow helped to compensate for a correction in domestic orders after the jump in February. The annual rate fell back to 2.4% from 4.7% year over year in the previous month, but still, these are robust numbers that together with the strong confidence data confirms that the German recovery remains well on track, even as other Eurozone countries are catching up.

Sentiment in Europe Remains Strong

Eurozone Sentix investor sentiment rose to 27.4 in May, from 23.9 in the previous month. Both the expectations index as well as the current conditions indicator improved and the numbers are adding to signs that the recovery continues and strengthens, which with the French election out of the way the data only backs expectations for a change in the forward guidance at the June meeting.

U.S. consumer credit rose $16.4 billion in March after climbing $13.7 billion in February which was revised from $15.2 billion and $9.7 billion in January which was revised from $10.9 billion. Non-revolving credit continued to lead the gains, rising $14.5 billion from $12.1 billion previously which was revised from $112.3 billion. Revolving credit edged up $2.0 billion from $1.7 billion which was revised from $2.9 billion.