Wednesday, May 12We Break the News

Italy Q1 GDP Shrinks Less than Expected, South African Rand Falls to Over 2-Week Low, French Shares Edge Higher on Friday, Singapore Equities Set to Close Week on High Note

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Italy Q1 GDP Shrinks Less than Expected
Italy’s gross domestic product shrank 0.4 percent on quarter in the first three months of 2021, following a downwardly revised 1.8 percent contraction in the previous period and compared to market consensus of a 0.5 percent fall, a preliminary estimate showed. The services sector contracted after another wave of coronavirus cases led to the imposition of more restrictions on business during the first quarter of the year. Meantime, both industry and agriculture showed growth. On the expenditure side, exports were a drag on overall GDP while domestic demand increase. However, the second quarter looks like it will be brighter as the government eased curbs over much of the country from the start of this month as new infections gradually declined. Prime Minister Mario Draghi’s government forecasts the economy to grow 4.5% this year while warning that the outlook remains highly uncertain depending on the development of the Covid-19 disease.

South African Rand Falls to Over 2-Week Low
The South African rand traded slightly lower at 14.4 against the greenback on Friday, its lowest level on a closing basis since April 14th, dented by an uptick in the dollar and a spike in domestic infections.

French Shares Edge Higher on Friday
The CAC 40 attempted a rebound on Friday, hovering around over 20-year highs and following cautious gains of its European peers, as investors welcomed a new batch of earnings results and economic data. The French economy advanced 0.4% QoQ in the first three months of 2021, faster than the 0.1% growth estimates, helped by Macron’s decision to hold off a national lockdown. On the earnings front, BNP Paribas posted an 11% jump in Q1 net earnings to €1.8 billion, beating estimates of €1.2 billion, underpinned by its investment banking division. Also, French aero engine and equipment maker Safran reported a 38% plunge in Q1 revenues to €3.3 billion, citing pandemic-related struggles.

Singapore Equities Set to Close Week on High Note
The STI added 3 points or 0.1% to a near 15-month high of 3,225 in late deals on Friday and is set to close the week 1% higher, amid encouraging US data as the economy grew sharply in Q1, while the number of people seeking unemployment last week reached its lowest point since the pandemic struck. Traders were also upbeat after data showed Singapore bank lending rose to the highest in a year in March, with both consumer loans and lending to businesses growing. Traders paid little interest to news that US President Joe Biden will maintain a strong military presence in the Indo-Pacific. On the business side, local media reports said that business expectations of Singapore firms improved, amid ongoing vaccinations across countries, with a weighted 41% of manufacturers seeing business conditions improving over the next six months, according to the Economic Development Board survey. Mapletree Commercial Trust gained 0.5%, while Jardine Matheson rose 0.3%.

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