LIVE MARKETS-"Inflection point" for markets too

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"INFLECTION POINT" FOR MARKETS TOO (0702 GMT)

It will be an eventful week not least in the United States
where U.S. Congress debates a $2 trillion infrastructure bill,
inflation plus retail sales data will be released, banks report
Q1 earnings and $96 billion of three- and 10-year notes will be
auctioned on Monday. "An inflection point", Fed chairman Powell
dubbed it in a weekend interview.

Newsflow was hectic over the weekend too after China slapped
New-York-listed e-commerce giant Alibaba with a record $2.75
billion fine. Expect more of the same as Beijing bulks up
resources to crack down on anti-competitive behaviour.

Alibaba shares shrugged off the fine to rally in Hong Kong
but Chinese equities fell almost 1%, leading Asian shares lower.
European and U.S. futures are down, so are bond yields.

In contrast to signs of a strong global growth pick-up and
robust company earnings, the virus newsflow remains worrying.

India has surpassed Brazil in terms of infection numbers and
Germany removed powers from its "Länder" in order to more easily
impose activity curbs on regions with high numbers of
infections. Monthly damage to Germany's economy may run at 10
billion euros, Commerzbank estimates.

U.S. Treasury yields meanwhile stand more than 10 bps off
recent highs. They have eased in recent days, despite a blowout
March payrolls report and the largest annual producer prices
gain in 9-1/2 years.

If dovish Fed assurances have indeed sunk in, it could mean
a turning point for the dollar which has lost 1% in April
following a 3.6% gain in Q1.

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

- UK retail opens up as lockdown eases.
-Bavarian premier Markus Soeder will run as a candidate for
German chancellor in September elections.
-Russian foreign minister Lavrov in Egypt.
-Euro zone retail sales data due.
-CEOs of almost 20 major companies including General Motors,
Ford Motor and Taiwan Semiconductor to attend White House summit
on semiconductor shortages.
-Companies: Microsoft is in talks to buy AI business Nuance
Communications for about $16 billion; UK shopping centre
operator Hammerson may sell retail parks portfolio to Canadian
private equity firm Brookfield: UK cyber security firm Darktrace
to float in London.
-Ibero-American banking conference with governors of Bank of
Spain and Bank of Portugal.
- Far-left candidate Pedro Castillo faces conservative Keiko
Fujimori in a June run-off of Peru's presidential election; In
Ecuador, banker Guillermo Lasso unexpectedly won a presidential
election.

(Sujata Rao)

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EUROPE SET TO OPEN LOWER AS U.S. EARNINGS SEASON KICKS OFF
(0540 GMT)

After touching fresh record highs last week, European
bourses are seen opening lower mirroring Asia shares as earnings
season in the U.S. kicks off with investors looking for signals
that earnings can justify sky-high valuations.

Global investors are also expected to react after an
anti-monopoly probe in China found the e-commerce giant Alibaba
Group Holding abused its dominant market position for
several years.

China slapped a record 18 billion yuan ($2.75 billion) fine
on the e-commerce giant and reverberations could be felt beyond
the Asian country as over a third of the stock is held by U.S.
investors.

Over the weekend, Fed Chair Jerome Powell said the economy
is about to start growing much more quickly, though the
coronavirus remained a threat.

(Joice Alves)

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