During the European session we got headlines from China as authorities there are doubling down on trying to stimulate the economy, while also wanting to bolster the yuan currency.
The latest measures look to be involving banks as Beijing calls to cut both local and dollar deposit rates as the economy continues to generate poor economic signals.
The Chinese self-regulatory body overseen by the central bank has reportedly asked major state-owned banks to lower their dollar deposit interest rates, with the cap now being at 4.3% for dollar deposits of $50,000 and above.
This move was seen to largely to try and encourage Chinese firms, particularly exporters, to settle their FX receipts in the yuan after the currency has fallen considerably over the past few weeks against the dollar.
Aside from the move from China data during the morning session showed that Factory orders in Germany unexpectedly dropped by 0.4% mom in April 2023, missing market estimates of a 3.0% rise and following an upwardly revised 10.9% fall in March.
This was the second straight month of decline in industrial orders, dragged down a fall in large-scale orders. The euro currency was notably weaker after this poor data point.
New orders for miscellaneous vehicle construction, which includes the construction of ships, railed vehicles, aircraft, spacecraft, and army vehicles, plunged 34% and those for manufacture of machinery and equipment went down 6.2%.
Excluding large-scale orders, new orders rose 1.4%. Also, capital goods orders were down 1.7%, and orders for consumer goods fell by 2.5%. On the other hand, orders for motor vehicles and motor vehicle parts rose significantly by 2.4% and demand for intermediate goods increased by 2.3%. Foreign orders decreased 1.8%, with those from the Euro Area down 2.7%, while domestic orders went up 1.6%
Retail sales in the Euro Area remained unchanged in April 2023, following a revised 0.4 percent decline in March, and falling short of market expectations of a 0.2 percent growth. Comparing the data on a yearly basis, retail sales dropped 2.6 percent, marking the seventh consecutive month of contraction.