April 11, 2019

Daily Market Review – Thursday, April 11, 2019

Asia

Asian markets are closing in the red this morning led by the Shenzhen Composite’s -1.94% and mainly reacting to a soft FOMC report yesterday. The Nikkei straddled the zero at +0.07% and New Zealand managed to eke out a ½% gain. Despite missing expectations, China’s CPI nearly doubled to 2.3% in March YoY, after the week’s positive producer price data. In Australia, consumer inflation expectations for April have been downgraded 2/10 to 3.9%, leaving the AUD optimistic but failing to cross resistance at 0.7174.

Europe

The Pound is back on its way up after the EU granted the UK another 6 months on its Brexit date, this following a dip as the week began resulting from the failure of the May-Corbyn talks. UK manufacturing data yesterday was strongly in the Green, January’s contractionary YoY figures now in positive territory for February. The nation’s trade deficit contracted to 4.86bn GBP, though missed expectations and GDP grew by 0.2% despite expectations of zero growth.

The ECB’s policy statement yesterday confirmed – besides Brexit fatigue – slower continental growth due to global uncertainties. On the horizon – hints to return TLTROs, which are ECB loans to banks as an incentive to increase lending, a non-standard form of monetary accommodation. Ironically, industrial output in France and Italy surprised pundits by surging into positive territory in February. Germany and France kicked off today’s CPIs by remaining steady in March.

US

US markets closed in the green yesterday led by the Nasdaq’s 0.69%, as earnings season enters full speed tomorrow with JP Morgan at the head of the crowd. The FED’s Open Market Committee minutes, meanwhile, also show increased submission to the need to lighten the fiscal burden. Here, too, global uncertainties rule alongside an inability to achieve inflation targets, and despite labour market improvements. Interestingly, March’s CPIs, which came in 5 hours before the minutes, show a marked improvement in March to 1.9% YoY with food and energy subtracted – the monthly 0.4% gain representing its best performance in over a year.

Commodities

Crude inventories are at a 17-month high, based on last night’s EIA report of a 7mB increase. The commodity itself, however, and despite yesterday’s pullback, continues consolidating upwards with the Asian session quite clearly determining support at 64.20.

Gold also is showing more upward pressure than down, after hitting a 2 week high on the FED’s minutes and capping 4 days of straight gains – so far.

And Bitcoin’s April Fools ETF prank continues to fuel the upward cycle, the coin hitting 5,390 last night and the retracement’s low confirming the uptrend.

Shares

As mentioned, earnings season kicks off this Friday with JP Morgan reporting before the opening bell. Branch closures amidst a drop in client activities bode bad following the extended government shutdown as the quarter began. Hopes, though, are that the FED’s more accommodating policies will provide a better year than 2018 maintain an EPS of $2.32, down from last year’s $2.37 on $2.35bn quarterly earnings. Next week, stay tuned for Netflix, Goldman-Sachs, Citi, BoA, J&J and much more!

Events

08:40 AM GMT – Spain 3, 5 & 10 Yr Bonds
12:30 PM GMT – US Producer Price indexes (Mar), and Initial & Continuing Jobless Claims (Apr 5)
12:30 PM GMT – CAD New Housing Price Index (Feb)
22:30 PM GMT – NZD Business PMI, Visitor Arrivals, & Electronic Card Retail Sales (Mar)
02:00 AM GMT (+1) – China Imports, Exports, Trade Balance CNY & Foreign Direct Investment (Mar)

For more, visit our Economic Calendar