Daily Market Outlook, April 24, 2023
Asian equity markets started the week with a cautious tone ahead of a round of headline risk, with US tech heavyweights set to report earnings and Friday’s Bank of Japan meeting with new Governor Ueda leading his first central bank session as we head into month end rebalancing and positioning.
The Nikkeii once again is faring best of the regional bourses as reports suggest that Friday’s BoJ meeting shouldn't see any immediate adjustments to the current easy monetary policy position, however, investors will be on alert as market chatter suggests the BoJ may announce a comprehensive review of its current monetary policy and its economic impact as the first phase of a planned approach to adjusting its monetary policy stance.
European investors continue to position for further ECB rate moves given the recent robust round of economic data with the April Composite PMI release exceeding expectations, hot on the heels of incremental improvement in the PMI prints during Q1, all of which implies that markets should see a Q1 GDP due later this week, demonstrating a modest uptick in activity over the quarter. Additional insight into economic momentum within the Eurozone in Q2 will be derived from today’s German IFO business survey for April. Investors will also hear from a bevy of central bank speakers including Vujcic, Villeroy and Panetta providing further colour with respect to the terminal rate for ECB rates.
In the US the tier one data docket is relatively tame, US investors will parse Fed surveys from the Chicago Fed (March) and Dallas Fed (April) will provide timely updates on regional trends across the US. The Fed is now in its blackout period ahead of its May 3rd FOMC meeting where markets are heavily pricing a 25bps move as such to a large degree markets interest has already moved onto to focus on June meeting expectations, with the central debate for US rate policy being with whether the FOMC will actually commence rate cutting later in the year.
FX Options Expiries For 10am New York Cut
(In bold represent larger expiries, more magnetic when trading within daily ATR)
A massive 40-billion between 1.09-1.11 expire through month end
EUR/USD: 1.0900 (900M), 1.0920-35 (910M), 1.0975-80 (378M), 1.1000 (753M)
EUR/GBP: 0.8825-30 (573M), 0.8860 (752M)
USD/JPY: 132.75 (425M), 133.70-82 (614M)
CFTC Data
USD net spec long pared slightly in Apr 12-18 period, $IDX -0.38%
USD offered amid speculation Fed nearing end of hike cycle
EUR$ +0.55% in period, specs +1,023 contracts now long 164,361
$JPY +0.3% in period specs +338 contracts, now short 56,869
GBP$ -0.04% in period, specs +3,700 contracts, flips to +1,302
$CAD -0.56% specs +10,346 contracts, now short 46,233
BTC +0.77% in period specs +633 contracts, short cut to 489 (Source RTRS)
Overnight News of Note
Asia Stocks Off To Slow Start In Earnings-Rich Week
US House To Vote On Republican Debt Limit Bill This Week
Central Bankers See Above-Target Inflation As Biggest Risk
Fed's Cook Sees A Less Certain Outlook For Future Of Monetary Policy
ECB’s Wunsch: To Keep Raising Rates Unless Wage Growth Slows
EU Set To Propose Banning Many Goods From Transiting Via Russia
French Food Inflation To Be ‘Difficult’ Until Autumn, Pres Macron Says
UK Home Sellers Slow Pace Of Increase In Property Asking Prices
Ueda: BoJ's Forecasts Must Be Quite Strong To Consider Tweaking YCC
Bank Of Japan To Review Policies From Past Decades, Sankei Reports
Dollar Edges Lower; On Track For Second Straight Monthly Loss
Russia’s Medvedev Says G-7 Export Ban To Trigger Grain Deal Exit
Amazon, Facebook, Google Headline Busy Earnings Week For Tech
Chip Designer Arm Makes Its Own Advanced Prototype Semiconductor
(Sourced from Bloomberg, Reuters and other reliable financial news outlets)
Technical & Trade Views
SP500 Bias: Intraday Bullish Above Bearish Below 4100
Primary support is 4000
Primary objective is 4207
Below 3985 opens 3950
20 Day VWAP bullish, 5 Day VWAP bearish
.png)
EURUSD Bias: Intraday Bullish Above Bearish below 1.09
Primary support is 1.07
Primary objective is 1.1128
Below 1.0700 opens 1.0660
20 Day VWAP bullish, 5 Day VWAP bearish
.png)
GBPUSD Bias: Intraday Bullish Above Bearish below 1.2330
Primary support is 1.2250
Primary objective 1.2659
Below 1.22 opens 1.2010
20 Day VWAP bullish, 5 Day VWAP bearish
.png)
USDJPY Bias: Intraday Bullish above Bearish Below 133.00
Primary resistance is 135.15
Primary objective is 129.15
Above 136 opens 137.90
20 Day VWAP bearish, 5 Day VWAP bullish
.png)
AUDUSD Bias: Intraday Bullish Above Bearish below .6640
Primary support is .6620
Primary objective is .6814
Below .6560 opens .6450
20 Day VWAP bearish, 5 Day VWAP bearish
.png)
BTCUSD Intraday Bias: Bullish Above Bearish below 28400
Primary support 26500
Primary objective is 30500
Below 26300 opens 25800
20 Day VWAP bullish, 5 Day VWAP bearish
.png)
Disclaimer: The material provided is for information purposes only and should not be considered as investment advice. The views, information, or opinions expressed in the text belong solely to the author, and not to the author’s employer, organization, committee or other group or individual or company.
Past performance is not indicative of future results.
High Risk Warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75% and 75% of retail investor accounts lose money when trading CFDs with Tickmill UK Ltd and Tickmill Europe Ltd respectively. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Futures and Options: Trading futures and options on margin carries a high degree of risk and may result in losses exceeding your initial investment. These products are not suitable for all investors. Ensure you fully understand the risks and take appropriate care to manage your risk.
Patrick has been involved in the financial markets for well over a decade as a self-educated professional trader and money manager. Flitting between the roles of market commentator, analyst and mentor, Patrick has improved the technical skills and psychological stance of literally hundreds of traders – coaching them to become savvy market operators!