Market News Today – US Equities moved down again (-0.68%) (Netflix subscribers fell – shares down 11% after close) USD move off 7-week lows (USDIndex at 91.20) & JPY gain safe haven bid as commodity currencies trade mixed. EUR holds 1.2030 & GBP at 1.4000. 10-yr Yields down at 1.56% mid-march lows. Asian markets down 2.0% and European FUTS off after DAX -1.55% & FTSE -2% yesterday. USOil holds at $62.00, Gold up to $1784 and the VIX up 15% to a 21.55 high. Virus rebounding in Asia (Tokyo & Osaka in lockdowns, India record daily cases 200k+ per day as cases double every 13 days) and LATAM (Brazil, Peru, Argentina & Uruguay lead infection spikes). ESL collapses after the 6 English cubs withdraw. Overnight data – AUD Retail sales beat significantly, NZD CPI was a tick better & UK CPI a tick worse. Xi to attend Biden climate summit for first meeting and Powell is planning to “limit inflation overshooting too far”.
European Open – Bunds slightly higher in opening trade, and the 10-year rate has dropped back -0.2 bp to -0.265%. Peripherals are outperforming for now, which is encouraging, but if risk appetite continues to wane, that will also rely on ongoing ECB support. Treasuries have held yesterday’s gains overnight and are still at 1.56%. DAX and FTSE 100 futures are moving higher, while US futures are paring some of their earlier losses, which suggests somewhat improved sentiment. Data releases at the start of the session included UK inflation numbers, which showed the headline CPI rate rising to 0.7% y/y in March, up from 0.4% y/y in the previous month, but actually slightly lower than feared. Core lifted to 1.1% y/y from 0.9% y/y with base effects playing a role. PPI data meanwhile showed sharply higher input as well as output costs, with the former reaching 5.9% y/y, the latter 1.9% y/y.
Today – Highlights include Canadian inflation, BoC rate decision, BoE’s Ramsden, Bailey, Earnings from Verizon, ASML (already out – a big beat) Ericsson, Baker Hughes, Halliburton and NextEra.
Biggest (FX) Mover @ (07:30 GMT) VIX.F (+15.00%) Gapped on open after strong day yesterday following stock market weakness and lows of 16.82 on Friday. Rallied to 21.55 highs. Faster MAs remain aligned higher from yesterday, RSI OB at 73 and cooling , MACD histogram & signal line aligned higher and over 0 line from Friday. Stochs OB zone and cooling. H1 ATR 0.47, Daily ATR 0.98.
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Stuart Cowell
Head Market Analyst
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