· French Socialist candidate Hollande secured 28.6% of 1st round votes, vs Sarkozy’s 27.1%. 2nd round takes place on May 6th.
- EU PMI:
- Mfg declined to 46 in Apr vs 48.1 exp and 47.7 prev
- Services declined to 48.9 in Apr vs 49.3 exp and 49.2 prev
- Both French and German figures were weak
Italian Consumer Confidence declined to 89 in Apr vs 96.2 exp and 96.8 prev
China HSBC Flash Mfg PMI improved to 49.1 in Apr vs 48.3 prev
- Mon: Australia CPI
- Tues: Swiss Trade Balance, Canada Retail Sales, US Consumer Confidence, New Home Sales, Apple Earnings after Mkt Close
- Wed: UKGDP, US DGO, FOMC + Fed projections
- Thurs: EU Confidence, German CPI, ChicagoFed, US Jobless Claims, Pending Home Sales, Japan CPI
- Fri: BoJ, German GfK Consumer Confidence, Spanish Retail Sales, Unemployment, Swiss KOF LEI, UMichigan Confidence
One thing we learned from 2H 2011 is that the US is fairly immune to EU problems. As a result, *if* the US data holds up, the decoupling should continue, and the S&P can probably stabilize, especially since earnings season so far looks decent. Risks to this view include warm weather payback for the data, the resin shortage for auto makers, expiring jobless claim benefits, and fiscal ‘cliff’ worries.
Separately, AU rates are starting to look quite rich. 3 cuts thorough year end looks quite substantial in the context of decent business confidence at home and PMI prints for Australia’s largest export markets. The bullish momentum is fairly strong, however, so proper timing will be especially important.