Following another rally on Wall Street and mostly positive dynamics in Asia, European stocks surged to fresh all-time highs on Friday amid strong economic data out of major countries. In the US, retail sales jumped 9.8% in March from February, exceeding forecasts for 5.5% growth. The job market report showed 576,000 people applied for unemployment benefits last week, the lowest number since the pandemic. In China, the data showed that the economy grew 18.3% in the first quarter, though the reading was slightly lower than expected, while retail sales rose strongly last month.
Eurostat’s final reading of the Eurozone CPI report for March showed that the consumer prices came in at 1.3% on a yearly basis, meeting the flash estimate of 1.3% and 1.3% expectations. On the negative side, Eurozone February trade balance came in at 18.4 billion euros versus 22.0 billion euros expected. The trade surplus narrowed considerably with exports seen down 2.5% on the month.
In individual stocks, German carmaker Daimler rose as the company posted a better-than-expected surge in quarterly operating profit due to strong demand in China. The company said that its quarterly adjusted group earnings before interest and tax jumped to 5.0 billion euros from 719 million a year earlier. The company’s stocks were trading 2.69% higher following the preliminary report. The firm is due to release detailed quarterly results on April 23.
Elsewhere, Germany’s Chancellor Angela Merkel requested to grant her new powers, which would allow her to force coronavirus lockdowns and curfews on areas with high infection rates. She also said that a majority of Germans were in favor of stricter measures.
Against this backdrop, the FTSE 100 in London gains 0.65% to 7,028, Italy’s FTSE MIB adds 0.62% to 24,680, France’s CAC 40 is up by 0.43% to 6,261, while the German DAX 30 up by 0.82% to 15,380. US stock index futures steady after yesterday’s rally.
In currencies, the dollar remains on the defensive despite some recovery attempts seen earlier in the day. As such, EURUSD resumed the upside but still struggles to challenge the 1.2000 barrier that represents the immediate target for euro nulls at the moment. It looks like the pair will fail to overcome this barrier in the short term despite dollar weakness, especially amid unimpressive economic data out of the Eurozone.
Nathan Lambert, Head of Global FX Analytical Department