Overnight Headlines and Three Items for the Day Ahead

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

Headlines:

• Euro area: Euro area HICP inflation fell to 0.5% y-o-y in May (flash) from 0.7% in April (Consensus: 0.6%).
• China: The final reading of the HSBC PMI for May declined to 49.4 from the flash figure of 49.7, but was still much higher than the 48.1 recorded in April.
• India: The Reserve Bank of India left policy interest rates unchanged at 8.00%, in line with expectations, but cut the SLR by 50bp to 22.5%.
• Australia: The Reserve Bank of Australia left rates unchanged at 2.5%, as expected.
• Australia: The current account deficit narrowed to AUD5.7bn in Q1 from a revised AUD11.7bn deficit in Q4.
• South Korea: CPI inflation rose to 1.7% y-o-y in May from 1.5% in April (Consensus: 1.6%).

The Day Ahead

• US weekly chain store sales: Aggressive promotions and competitive pricing helped support retail activity in the latest week, but stormy weather held back consumer activity in some regions. The upcoming report will capture part of the Memorial Day holiday weekend, which likely helped boost the chain store sales indices.
• US factory orders: Factory orders rose at a solid pace in March after being depressed between December and February. Orders should rise again in April, as signalled by the increase in the advanced reading on durable goods orders. Consensus expects factory orders to rise by 0.5% m-o-m in April.
• US vehicle sales: Vehicle sales averaged an annualised 16.2 million between March and April, the best two-month performance since 2007, partly due to pent-up demand for vehicles after bad weather kept potential buyers away from dealerships. We expect to see another strong showing for vehicle sales in May and forecast vehicle sales at an annualised rate of 16.1mn units.

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