Market Update – April 21 – Recession Fears Hit Sentiment

April 21, 2023

The USD rotated (USDIndex at 101.60) as Fedspeak (all 5 mantra was “inflation is still too high”) and fundamental data (Existing Home Sales, Leading Indicators, Philly Fed & Weekly Claims) all conspired to dent sentiment and raise fears of recession again, as uncertainty rules. Treasuries rose and Stocks closed down, (#TSLA, -9.75% & #AT&T -10.4% led decliners). Europe closed at low’s, Asian markets are also lower, JPY gets a wee lift ahead of the BOJ next week with AUD & NZD lower. Oil continues to decline and is heading for a big weekly loss. Gold is under $2k & BTC tests $28k once again down -7.85% this week.

Overnight AUD April PMI data; Manufacturing missed and declined (48.1 from 49.1) & remains in contraction and actually worsened, Services improved (52.6 vs. 50.7). UK Consumer confidence surprised and hit a 14-mth high (-30 from -35, winter fuel bills out of the way?) March Retail Sales missed -0.9% vs. 1.1%.

FX – USDIndex rotates at 101.50, EUR down at 1.0935 and JPY under pushed under 134.00 to support before recovering. Sterling is under 1.2400 at 1.23900.
Stocks – US markets closed down (-0.33% to -0.80%) #US500 closed -24.73 (0.60%) at 4129. – US500 FUTS are at 4146 and below the key resistance at 4175 & 4150.

Commodities – USOil – Futures tanked into $77.00 today as recession fears grow, Gold – continued to slip, testing $1981 today.0
Cryptocurrencies – BTC decline from the $30k level continues, testing $28k today.

Today – UK Retail Sales, EZ, UK & US Flash PMIs, Speeches from Fed’s Cook & Harker, ECB’s Elderson & de Guindos. Earnings from Kering & SAP.

Biggest FX Mover @ (06:30 GMT) AUDJPY (-1.06%). Tanked from following PMI’s and ahead of BOJ next week, from 90.77 yesterday to under 89.50 today. MAs aligned lower, MACD histogram & signal line negative & falling, RSI 22.75, OS but still falling, H1 ATR 0.169 Daily ATR 0.8000.

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Stuart Cowell

Head Market Analyst

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