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USD/JPY Fades After 2019 High

USD/JPY Fades After 2019 High

USD/JPY Fades After Fresh 2019 High, Back Below 112.00

USD/JPY hit a fresh year-to-date high of 112.17 earlier today. So far, however, the follow-through has been weal.

The pair has fallen back below 112.00, despite an above-forecast China macro data. The futures on the S&P 500 and treasury yields are also struggling to cheer China data.

USD/JPY is currently trading at 111.95, having hit a 2019 high of 112.17 earlier today.

The lack of strong follow-through has weakened the bullish case put forward by Friday’s convincing move above 111.82 (April 5 high).

Also, the pair’s inability to hold above 112.00 is somewhat surprising as China’s first quarter GDP data and March industrial production and retail sales figure released earlier today was risk-supportive.

That said, the futures on the S&P 500 have also failed to pick up a strong bid in response to China data. At press time, the futures are trading at 2,913, representing just 0.08 percent gain on the day. Further, the 10-year treasury yield is also flat-lined on the day near 2.6 percent.

 

Article by FXStreet

S&P500 Hits 6-Month Low

S&P500 Activity Hits 6-Month Low, Stones Throw From Record

This past session offered a clear shift in both realized market activity and expected volatility – both would drop even further into extreme lows. There are still a host of systemically-important and unresolved fundamental issues lurking through the global markets, but the scheduled sparks to thrust these issues and their implications to the forefront have thinned out. The outlook for growth remains the most troubling and accessible threat to the future with the downgrade in 2019 GDP forecasts from the IMF and WTO still ringing in our ears while the former’s Global Financial Stability Report (GFSR) made clear that there were a host of threats that could suddenly unseat the world’s fragile sense of stability. Remarks from the White House’s chief economic advisor that President Trump could push forward with $125 billion in tax cuts with subsequent spending cuts doesn’t exactly earn the enthusiasm the first tax effort had. Perhaps US corporate earnings with JP Morgan and Wells Fargo figures will take the growth focus in a different direction – leveraged corporate profits.

With the fundamental engines cooling off, we naturally finding both implied (expected) and realized volatility are easing across the financial system. The S&P 500-based VIX volatility index is floundering at lows stretching back to early October before the fourth quarter swept through the markets. That has in turn seen the S&P 500 and Dow deflate 5-day (one trading week) average daily ranges to their lowest levels in a similar time span. That is proving frustrating for bulls who are trying to cover the final stretch of the first quarter recovery effort and return the indices back to record highs – less than 2 percent from Thursday’s close. Low volatility usually supports a speculative reach, but the threshold for speculative climb is not as low as it once was. For US indices, the proximity to record high increasingly reflects a record high cost to jump on board and there come serious questions as to how much return that will afford. Dividends certainly won’t compensate for that investment and capital gains (buy low, sell high) is cast in serious doubt after 2018’s fireworks. Meanwhile, rest of world equities (VEU) and emerging markets (EEM) are struggling to overtake the mid-point of their total losses this past year. This does not bode well for a return to the default advance alongside complacency upon which we depended for much of the performance between 2014 and 2017.

Article by DailyFX

Gold Plummets Below $1300

Gold Plummets Below $1300 Mark, Hits 3-Day Lows On Stronger USD

Gold extended its sharp pullback from two-week lows and tumbled below the key $1300 psychological mark during the early North-American session.

The precious metal failed to capitalize on the recent positive momentum and started correcting from the $1310-11 supply zone, the highest level since March 28 touched amid firming expectations that the Fed will hold interest rates steady at least through the end of the year. 

With investors looking past the latest FOMC meeting minutes, a goodish pickup in the US Dollar demand turned out to be one of the key factors prompting some aggressive long-unwinding/fresh selling around the dollar-denominated commodity.

The downward momentum accelerated further following the release of upbeat US economic data, showing that initial weekly jobless claims unexpectedly dropped during the week ending April 6 and sank below 200k for the first time since 1969.

Separately, March’s PPI rose 0.6% m/m in March, which coupled with a solid bounce in the US Treasury bond yields exerted some additional downward pressure on the non-yielding yellow metal and took along some short-term trading stops placed near the $1300 mark.

The bearish pressure, however, eased a bit, helping the commodity to bounce off session lows, around the $1295-94 region, following some fresh dovish comments by St. Louis Fed President James Bullard, saying that March FOMC marked the end of policy normalization.

It, however, remains to be seen if bulls are able to find any meaningful respite or the current downfall marks the resumption of the recent downward trajectory amid fading safe-haven demand on the back of positive mood around equity markets and a bearish technical set-up on the daily charts.

Article by FXStreet

How Could China CPI Affect AUD/USD

How Could China CPI Affect AUD/USD

When is China CPI/PPI and how could it affect AUD/USD?

Thursday’s Asian session will offer China’s latest Consumer Price Index (CPI) and Producer Price Index (PPI) figures for March month at 01:30 GMT.

China CPI/PPI overview

China’s annualized CPI reading is expected to increase to 2.4% from 1.5% with PPI YoY likely rising to 0.4% from 0.1%. On an MoM basis, CPI is forecast to tick down from 1.0% to -0.2% for March. Recent improvements in China data and a likely trade deal between the US and China could get additional support to boost the Australian Dollar if headline inflation data follow the suit.
Barclays and Westpac had their own forecasts spread out ahead of the release. While Barclays expect an uptick in the headline inflation numbers, Westpac expects price pressures remaining contained.

How could it affect the AUD/USD?

The latest positive pattern from Australian and Chinese data, coupled with developments at the US-China trade negotiations, has been praising the Australian Dollar (AUD), strong headline economics from its largest consumer can strengthen the AUD, also known as Aussie.

It should also be noted that Australia’s consumer inflation expectations for April, up for release at 01:00 GMT on Thursday, could also affect the AUD/USD moves. The reading last came in at 4.1%. However, the main focus of the market will be on China’s inflation numbers as the dragon nation is Australia’s largest consumer.

Should there be an uptick in headline inflation numbers, the AUD/USD pair may rise further towards 0.7200 resistance-confluence, comprising 200-day simple moving average (SMA) and a downward sloping trend-line stretched since June 2018. It should also be noted that the pair’s successful break of 0.7200 enables it to challenge 0.7235 while targeting 0.7310 resistance.

On the contrary, weak data can fetch the quote back to 100-day SMA level of 0.7145 ahead of highlighting 0.7130 and 0.7110 comprising 50-day SMA.

Article by FXStreet

Crude Oil ECB Fall?

CRUDE OIL PRICES MAY FALL ON DOWNBEAT ECB, FOMC GLOBAL SLOWDOWN FEARS

Crude oil prices fell alongside stocks yesterday amid a broad-based deterioration in risk appetite. The bulk of the move played out after the IMF unveiled a grim global economic outlook update (as expected). Earlier worries EU-US trade war risk and a downgrade of Italy’s growth outlook – along with its implications for renewed budgetary tensions between Rome and EU authorities – added to the downbeat mood. 

Looking ahead, the ECB monetary policy announcement as well as the release of minutes last month’s FOMC meeting are in focus. Grim rhetoric speaking to policymakers’ deepening concerns about a downshift in the global business cycle may keep markets in a defensive stance. That seems to bode ill for oil. As before, the impact on gold will depend on the relative magnitude of divergent moves in bond rates and USD.

Elsewhere, industrial production figures from Italy, France and the UK as well as the monthly UK GDP report may inform global growth bets. US CPI is also on tap. A tendency to disappoint on recent macro news-flow warns of soft results that might pressure sentiment further. Finally, EIA inventory data is seen showing stockpiles added 2.5 million barrels last week. API flagged a larger 4.09-million-barrel rise yesterday. 

Crude Oil Technical Analysis

Crude oil prices put in a Harami candlestick pattern below support-turned-resistance in the 63.59-64.88 area. This is a sign of indecision that may precede a downturn. A daily close below the $60/bbl figure would break the uptrend from late December and expose 57.24-88 zone. Alternatively, a push above 64.88 is followed almost immediately by another layer of resistance in the 66.09-67.03 infection zone.

Article by DailyFX