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MORNING BID- Falling from peaks

05/11/2021 02:53
MORNING BID- Falling from peaks

- A look at the day ahead from Danilo Masoni.

The euphoria that followed the shock U.S. payrolls data last week has fizzled out, leaving inflation worries take centre stage again and sucking some air out of the powerful rotation into assets geared to the economic recovery.

Falls in European stock futures have reached 1.5%, a day after the region's top benchmark hit a fresh record high. The Dow Jones also snapped back from all-time highs overnight and in the commodities space, Shanghai copper is off historic peaks, along with iron ore futures after a red-hot rally.

Asian stocks are on course for their worst day in two months and Wall Street too is set for more declines later on, mainly dragged down by Big Tech.

So while investors await tomorrow's U.S. CPI, which is expected to show a 3.6% rise year-on-year, data earlier today from China added to inflation concerns, as factory gate prices rose at the fastest rate in three and a half years in April.

In corporate news, the steep falls in Meituan gave another illustration of the tech sector's troubles. Shares in China's food delivery giant fell almost 10% at one point after its CEO posted and then deleted a post that some viewed as criticism of Beijing's ongoing regulatory crackdown.

In Europe, solid earnings updates continued. Thyssenkrupp raised its outlook for the second time in three months, sending its shares up 1% premarket. K+S raised its core profit forecast, saying a rise in potash prices should have an increasingly positive impact in the coming quarters.

Key developments that should provide more direction to markets on Tuesday:

  • BOJ policymakers warned of uncertainty over recovery prospects at meeting

  • China's factory-gate prices surge, but CPI growth still modest

  • Softbank to invest up to $2.3 bln in UK ecommerce group THG

  • German ZEW economic sentiment May

  • UK BRC retail sales

  • BOE's Andrew Bailey speaks on LIBOR/SOFR 1430 GMT

  • Auctions: U.S. 3-year notes; Japan 10-year; UK 40-year

(Reporting by Danilo Masoni)

(([email protected]; +39-02-66129734; Reuters Messaging: [email protected]; On Twitter https://twitter.com/damasoni))