Last checked at 
* A look at the day ahead from EMEA deputy markets editor
Sujata
Rao. The views expressed are her own.
LONDON, April 16 (Reuters) - Is this unwillingness to build
much further on the rally of recent weeks, or are we about to
see the start of another leg of losses? Unclear, but there is a
tentative air to this market. What markets cannot ignore is the
constantly worsening economic data, plus signs that COVID-19
won't go away soon, even if some countries are mulling easing
lockdowns.
Still, markets appear to have seized on the latter - after
last night's Wall Street slide and earlier falls across Asia,
U.S. equity futures are higher and European shares are up 1%.
Even shares in travel and leisure firms such as Cineworld and
Carnival have bounced around 2%.
For instance, Volkswagen said factories producing cars in
Germany and Slovakia will resume production from April 20, with
other locations reopening from April 27 onwards. Governors of
about 20 U.S. states also may start reopening their economies by
May 1, while Germany hopes to open schools and some retailers
starting May 4.
The dollar has ceded most early gains, while yields on
Treasuries and Bunds have inched higher. Here's another bright
spot -- Taiwan Semiconductor's first-quarter net profit almost
doubled, thanks to strong demand for faster chips – shares are
up 1.4%.
But there's no escaping the fallout. After dire
International Monetary Fund forecasts, markets expect China to
report on Friday that first-quarter gross domestic product
contracted for the first time on record. We also saw yesterday
an 8.7% plunge in U.S. March retail sales, manufacturing output
dropping the most in over 74 years and April manufacturing in
New York state at the lowest ever.
Today, U.S. weekly jobless claims should show a rise of some
5 million, according to a Reuters poll. We also get the Philly
Fed business conditions index and results from Bank of New York,
BlackRock, BNY Mellon and a couple of U.S. airlines.
Bank shares led Wall Street's fall last night, as big U.S.
lenders set aside billions of dollars to prepare for loan
defaults, while Bank of America and Citigroup reported plunging
first-quarter profits. Retailer J.C. Penney is reportedly
exploring filing for bankruptcy, no doubt the first of many in
the sector. All that sent U.S. two-year Treasury yields below
0.2% for the first time in three years.
In Europe, Italy worries are back with a vengeance, with
10-year bond yields back above levels touched before the
European Central Bank's emergency bond-buying programme. Yields
have eased today ahead of a videoconference of EU finance
Ministers but Italy's premia over Germany are firmly above 230
basis points.
Also worryingly, Italy's ruling parties are squabbling over
using European Union bailout funds. They fear that would weaken
the coalition, hampering efforts to deal with the virus.
On Europe's corporate front, there are some not-too-bad
headlines for a change:: Germany's Zalando expressed
optimism for the second quarter, EasyJet says it can
survive a lengthy fleet grounding. In health care, BioMérieux
and Draegerwerk have seen exceptional order spikes due to corona
demand.
Chocolate maker Barry Callebaut has tapped a 1
billion-euro revolving credit facility to beat the cash crunch.
Other earnings: Schroders sees first-quarter assets fall
from record highs and Ashmore assets plunge due to selloff in
emerging markets.
Emerging markets remain stuck in reverse -- MSCI's EM
currency index is down 0.3%, with the yuan slipping to its
weakest in more than a week. South Africa's rand was 0.2% lower
after the IMF's forecast of a 5.8% economic contraction and
interest rates falling to record lows.
Other news: the Philippines bank cut interest rate by 50
basis points in an off-cycle move. India's merchandise exports
in March shrank by more than a third from a year ago. Fitch cut
Mexico's rating to one notch above junk on fears of "severe
recession".
+++ MARKET DATA DIARY ++++
China house prices March
Australia jobless March
UK BRC retail sales March
German final inflation
Russian inflation March
Bank of Canada meeting 1400 G
Fed Beige Book for economic conditions 1800 G
Spanish bond auction
US housing starts March
US weekly jobless claims
Philly Fed index April
European earnings: LVMH, Dior, L’Oreal, Accor
US earnings – BlackRock, BNY Mellon, Blackstone, Honeywell,
Delta Airlines,
