Yields bid, Stocks sink, EUR recovers, Oil lower – Treasuries dived into close on Friday and are down again to start the week, and all other markets are taking a lead from the pronounced move. Official confirmed BOJ will maintain loose monetary policy.
- Stocks were mixed on Friday (NASDAQ -1.34%) weak in Asia (Covid & weak fixed income markets) & UK & European FUTS. down (-0.2 to 0.6%).
- Yields rally as curve steepens – US 10-yr now at 2.776%.
- EUR picked up after French Election result. USD bid elsewhere.
- USD bid especially vs. weaker JPY (over 125), AUD, CAD & NZD.
- Oil down 2% – after addition reserves released from EIA countries.
Pope calls on Russian & Ukraine leaders to observe Easter truce. Biden to meet Modi and call for no increases in Russian oil imports, Johnson met Zelenskiy in Kiev, Zelenskiy praised Scholz & Germany after meeting. Putin replaces top field General, focuses on Eastern Ukraine, reports he sees victory within 4-weeks.
Overnight – Chinese inflation leaps – CPI 1.5% vs 1.3% & 0.9% previously, PPI cools 8.3%vs. 8.1% & 8.8% previously. Weak UK GDP February m/m GDP +0.1% vs +0.3% m/m expected, other industrial data also missed, pressures Sterling.
Week Ahead – The second week of April has some key data releases topped by the rate decision from the ECB, supported by decisions & outlooks from BOC & RBNZ. Global Inflation data from China, Germany, the UK & US, US Retail Sales data and Australian Jobs data will provide more guidance on the outlook. The week also the heralds the start of the Q1 Earnings Season with the major Wall Street banks all reporting.
- USDIndex rallied to new high 100.17 since May 2020 on Friday, trades at 99.80 now.
- US Yields 10-yr closed higher again at 2.713, up again now to 2.77%.
- Equities – USA500 -12 (-0.27%) at 4488. – US500 FUTS 4476. Technology stocks & Consumer Discretionary led decline, & Energy led value stocks higher. TWTR -3.75% (ahead of Musk declining role on the board).
- USOil – Trades at $95.90 following rally to $98.00 on Friday and dip to $93.78, on Thursday. Oil markets lost over 3% last week.
- Gold – gyrated from $1937 to $1950 on Friday, back to $1945 now.
- Bitcoin continued to decline from key 45k to trade at 42k support now.
- FX markets – EURUSD back to test 1.0900 now from 1.0835 on Friday. USDJPY breaks key 125.00 to trade at 125.20 and Cable sinks back to test 1.3000 as USD bid continues.
European Open – European stocks up from early lows. European stock markets started lower, but have started to find a footing. DAX and FTSE 100 are still down -0.19% and -0.29% respectively, but the French CAC 40 is up 0.4%, against the background of easing election jitters after Macron managed to beat Le Pen in the first round of the presidential election yesterday. The two will now face each other in the final round on April 24, but with the result looking somewhat clearer than some polls had suggested French stocks are looking brighter this morning.
Today – Speeches from Fed’s Williams, Bostic and Evans.
Biggest FX Mover @ (07:30 GMT) EURJPY (+0.99%) Recovering EUR and weaker JPY combine to push pair from 134.35 lows on Friday to 136.60 now. Next resistance 137.00 MAs aligned higher, MACD signal line & histogram higher, RSI 79.50, OB & rising, H1 ATR 0.254, Daily ATR 1.54.
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Stuart Cowell
Head Market Analyst
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