Market Update – April 19 – USD Holds gains , UK CPI very hot

By
Analysis Team
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The USD rotated (USDIndex at 101.50) as Bonds lead with Yields higher too. Expectations for a 25 bp May Fed rate hike continued to rise on more hawkish Fedspeak, Bullard even talked of two more 25bp after May, Bostic sees 25bp in May and then a pause for the rest of the year. Stocks closed flat, BoA and J&J big beats, GS strong EPS but revenue missed. After hours Netflix missed subscriber numbers and shares tanked -12% on poor Q2 outlook – but full year offered better numbers and the losses were reversed completely. ECB’s Lane sees 3 more hikes for the common currency area and remains Hawkish, despite talk of FED pause.
Overnight strong  UK CPI disappointed, headline missed and remained over 10% at 10.1%, the key CORE number is 3 x times the BoE target at 6.2%, RPI 13.5% and the Food & Non-Alcoholic  Component a staggering 19.2%. Service Inflation also rose to 5.7%
  • FX – USDIndex rotates at 101.50, EUR holds through 1.0970 and JPY pushes  higher again breaching 134.50. Sterling got a big boost from the inflation data and trades at  1.2470.  
  • Stocks – US markets closed flat again (-0.04% to 0.09%) #US500 closed +3.55 pts. at 4154. – US500 FUTS are at 4167 and below the key  resistance at 4175. 

  • Commodities – USOil – Futures declined into $80.00 yesterday but has recovered to $80.40 day. Gold – continued to slip, testing $1986, before recovering to trade at $1994.0
  • Cryptocurrencies – BTC rallied from the $30k level yesterday to $30.5k and back to $30.0k today. 

Today – EZ HICP (Final), New Zealand CPI, Speeches from ECB’s Lane & Schnabel, Fed’s Goolsbee, BoE’s Mann,  UK & US, Earnings from ASML, (big beat)  Heineken, (beat)  Just Eat (mixed), American Airlines, IBM, Tesla, Morgan Stanley.

Biggest FX Mover @ (06:30 GMT) GBPJPY (+0.67%). Rallied from 0166.75 pre Inflation data to 167.65.  MAs aligned higher, MACD histogram & signal line positive & rising, RSI 80.30, OB but still rising, H1 ATR 0.187 Daily ATR 1.34.

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Stuart Cowell

Head Market Analyst

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