Watch These Seven Items for the Day Ahead

Market strategists at Nomura, including Rohit Garg, highlighted the following six headlines overnight and said investors should keep they eye on these seven items for the day ahead:

Headlines:

• France: Consumer confidence remained stable at 85 (consensus and previous: 85) in May.
• Italy: Consumer confidence increased above expectations to 106.3 (consensus: 104.9; previous: 105.5) in May.
• UK: BBA loans for house purchase declined to 42,173 (previous: 45,045) in April.
• Belgium: CPI inflation declined to 0.36% y-o-y (previous: 0.62%) in May.
• India: Narendra Modi and 45 cabinet ministers are sworn in; Arun Jaitley is the new finance minister.
• Philippines: March‟s trade balance was slightly better than expected at -$146mn as import growth rose less than expected at 9.6% y-o-y (consensus: 11.0%).

The Day Ahead:

European Union: informal dinner of EU leaders to discuss Presidents for European Council and European Commission appointments.

ECB Forum on Central Banking in Sintra.

Germany Industry and Trade Chamber (DIHK) publishes its business survey result.

Austria OeNB Governor Nowotny holds press conference after the Bank's annual shareholder meeting.

US durable goods orders: Industrial production excluding transportation declined in April, but business surveys were broadly positive. Therefore, we expect durable goods orders excluding transportation to remain flat in April (Consensus: 0.0% m-o-m; Previous: 2.1%). Although orders for Boeing planes declined, motor vehicle assemblies rose in April. We forecast a 0.1% m-o-m increase in total durable goods orders (Consensus: -0.7%; Previous: 2.5%).

US Case-Shiller home price index: The Case-Shiller 20-city composite home price index increased by 12.0% in 2013, far exceeding the meagre 0.9% gain in 2012. However, the pace of price appreciation slowed between December and February and should continue to slow throughout 2014 as the number of homes available for sale rises and the share of distressed sales continues to decline. Consensus expects an 11.8% y-o-y increase in the index in March (Previous: 12.9%).

US consumer confidence: The Conference Board‟s measure of consumer confidence has been relatively elevated for the past two months and should be supportive for consumer activity. The preliminary reading of the University of Michigan consumer sentiment declined in early May. However, higher equity prices and lower initial jobless claims this month suggest that consumers might be more optimistic in May. We expect consumer confidence to improve and forecast an increase in the index to 83.0 from 82.3 in April (Consensus: 83.0).

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