Events to Look Out for Next Week

The focus remains on inflation and the much anticipated response from the FOMC, RBA and  BOE next week, while the markets price in action from the ECB down the road. The advent of month-end, a holiday in Japan on Friday, with the UK also shut on Monday accelerated some profit taking on Wall Street after the early rally. It looks as though many are sidelined into the weekend and ahead of the FOMC where there is a lot of uncertainty over the aggressiveness of the Fed’s normalization path, or BOE ‘s ambiguity. Hiking rates too much too quickly would only increase the risk of a stagflation scenario and the BoE’s current policy is already much closer to neutral than the ECB’s. The week also sees NFP, and employment data from Canada, Europe and New Zealand.

Monday – 02 May  2022

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• Retail Sales (EUR, GMT 06:00) – German Retail Sales for March are expected to steady at 0.3% m/m.
• Manufacturing PMI (EUR, GMT 07:55 – 08:00) – The German & Eurozone Manufacturing PMI for April are seen unchanged at 54.1 and 55.3 repsectively.
• ISM Manufacturing PMI (USD, GMT 14:00) – The ISM index is expected to rise to 57.5 from 57.1 in March, versus an 18-year high of 63.7 in March ’21, an 11-year low of 41.6 in April of ’20, and an all-time low of 30.3 in June of 1980.

Tuesday – 03 May 2022

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• Interest Rate Decision & Statement (AUD, GMT 04:30) – This week, Australia’s inflation surge puts pressure on RBA. Australia CPI lifted 2.1% q/q in the first quarter of the year, while the annual rate jumped to 5.1% y/y – the highest level since the introduction of the Goods and Services Tax in the early 2000s. As elsewhere the surge owes much to sharply higher fuel prices, which were up 11% versus the last quarter of 2021. Still, the higher than expected numbers will put pressure on the RBA to step in and hike rates, with the chances of a move in May rising. The numbers reflect to a large extend temporary factors and supply chain disruptions, but with labour markets tightening and the risk of second round effects mounting, the RBA might decide to step in before wage growth starts to get out of control, especially as underlying inflation was also substantially stronger than expected.
• Employment Change (EUR, GMT 07:55) – The German employment change is expected to show a contraction to -15K for April.
• Employment Rate (NZD, GMT 22:45) – The New Zealand employment change is expected to show a slowdown in the Q1 with unemployment at 3.2%, and participaion rate and labour cost index remain unchanged at 71.1% and 0.7% in Q1.

Wednesday – 04 May 2022

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• Retail Sales (AUD, GMT 01:30) – Australian Retail Sales s.a. for March are expected to decline to 0.5% from 1.8% m/m.
• Retail Sales (EUR, GMT 09:00) – Eurozone Retail Sales for March are expected to decline to 0.2% from 0.3% m/m and headline to dip to 1% from 5% y/y.
• ADP Employment Change (USD, GMT 12:15) – The key private payrolls number is expected to climb to 370K(a 85k decline on last month’s reading).
• Interest Rate Decision & Statement & Conference (USD, GMT 18:00) – The acceleration in price pressures alongside a strong labor market have significantly increased the risk of even more aggressive action by the FOMC than previously projected, with the markets now pricing in four consecutive 50 bp hikes beginning in May, with some chance for a 75 bp boost down the road.

Thursday – 05 May 2022

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• Trade Balance (AUD, GMT 01:30) – The trade surplus for Australia is expected to lower in March to 8.5bln from 7.45 bln in February.
• Interest Rate Decision & Statement & Conference (GBP, GMT 11:00) – BoE head Bailey already flagged at the last meeting that there is a real risk that the jump in living expenses will hit demand. He followed up last week by stressing that the bank is walking a very tight line between escalating price pressure and the output effects of the real income shock, with the risk that this could create a recession. Bailey flagged concern over what is happening in food prices and said the inflation target is facing the most severe test since the independence of the bank in 1997. The comments highlight that the outcome of the May meeting is not cast in stone yet and that even after the last statement flagged the likely need for additional rate hikes, the central bank could still have a change of heart. Indeed, much of the jump in prices is out of the control of the central bank, as energy price inflation is driven by global pressures and the fallout from the Ukraine war and sanctions on Russia. Hiking rates too much too quickly would only increase the risk of a stagflation scenario and the BoE’s current policy is already much closer to neutral than the ECB’s.

Friday – 06 May 2022

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• Event of the Week – Non-Farm Payrolls (USD, GMT 12:30) – An 380k April nonfarm payroll increase is anticipated, after gains of 431k in March, 750k in February, and 504k in January. Payroll growth should slow gradually through 2022 with reduced growth in the economy. Average hourly earnings are assumed to rise 0.4%, the same as in March, while the y/y wage gain should dip to 5.5% from 5.6%. In the last expansion, we saw a 3.5% peak for y/y wage gains, in both February and July of 2019, before the pandemic-boost to an 8.0% peak in April of 2020, and the ensuing strength in wage gains that has allowed continued robust y/y increases into 2022.
• Labour Market Data (CAD, GMT 12:30) – Canada’s unemployment is anticipated higher in April to 5.4% from 5.3%, with participation rate unchanged at 65.4%.

Click here to access our Economic Calendar

Andria Pichdii

Market Analyst

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in Leveraged Products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

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US Open – PCE Price Index remains elevated but are there signs of softness?

The Core PCE Price Index, the FOMC’s favourite measure of inflation, missed by a tick at 5.2% vs 5.3% (y/y). The headline posted a steep 0.9% gain versus 0.5% (m/m) previously. This could confirm the softening seen in the CPI, and add to the “peak inflation” argument? However, the Employment Cost Index beat big time at 1.4% vs 1.1% in Q1. Over to you Mr Powell…

 

Click here to access our Economic Calendar

Andria Pichidi

Market Analyst

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in Leveraged Products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distribution.

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Market Spotlight: NZDUSD Hits Final Target

NZDUSD Sell-Off ContinuesThe recent short trade issued in NZDUSD has hit its final target at .6450. With USD having increased significantly in the last fortnight, amidst an uptick in hawkish Fed signalling, NZD and the broader risk complex has struggled to maintain demand. Indeed, Fed tightening is coming amidst a broader backdrop of risk off flows linked to ongoing uncertainty around the Russia-Ukraine conflict. With the violence ongoing, and with risks of further escalation, there are continued downside risks for the risk complex, including high-beta currencies such as NZD. With this in mind, bears can look to hold shorts while the pair holds below the former 2022 lows of .6450.Keep an Eye OnLooking ahead, the key focus will be on the FOMC next week. With the Fed widely expected to lift rates by .5%, failure to do so would likely fuel a sharp correction in USD. However, should the Fed follow through and stick to hawkish guidance also (signalling further .5% hike to come), USD is likely to continue higher near term. Today, focus will be on US core PCE, which is a key inflation gauge used by the Fed. Following yesterday’s GDP miss, any undershoot today will likely weigh on USD into the Fed next week, while a beat should see renewed USD buying into the weekend.

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FOMO Friday: Record Losses in JPY

JPY Sees Heavy SellingAnother week comes to a close in financial markets, as we round the first third of the year. Once again, it’s been a very interesting week with plenty of big moves to note. In the FX space specifically, it seems that the main theme capturing attention this week has been the continued decline in the Japanese Yen. We’ve seen steep moves across the board but it’s the almost 4% rally off the weekly lows in USDJPY which seems to be the main pair dominating end of week chats. So, let’s take a look at what caused the move and, as ever, if you caught it? Well done! If not? There’s always next week.What Caused the Move?BOJ Reaffirms Easing StanceThe main driver behind the further decline in the Japanese Yen this week was the April Bank of Japan monetary policy meeting. The BOJ took the opportunity to reaffirm its commitment to staunchly maintaining an easing presence in the market. The bank noted that it will continue with its strategy of daily purchases of Japanese government bonds in a bid to keep bond yields at or near zero.Central Bank Monetary Policy DivergenceWith most of the rest of the G10 central banks having already embarked on a path of policy normalisation, or signalled their intent to, this latest message from the BOJ has created clear monetary policy divergence. The BOJ warned that the domestic economy is currently too fragile to withstand any such tightening from the BOJ.Increased Fed HawkishnessAt the same time that the BOJ is reaffirming its commitment to easing, Fed expectations are turning ever more hawkish. The market is now widely pricing in a .5% hike next week from the Fed, in line with a raft of hawkish commentary from Fed members and the very hawkish details revealed in the March FOMC minutes. The minutes revealed that the Fed discussed hiking by .5% in March but opted to wait. However, over half of the Fed’s members are now in favour of using larger .5% hikes, with May likely to mark the first of a series of larger hikes.Technical ViewsUSDJPYFor now, USDJPY continues to move higher within a steep, narrow channel. Price has recently broken through the 125.65 and 128.50 levels and, while above the latter level, the focus remains on a continuation towards the 134.39 level next. However, worth noting that we are seeing bearish divergence in momentum studies, so be aware of reversal risks near term.

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House prices are soaring – here are the best housebuilders to buy to profit

Demand for housing in the UK continues to outstrip supply – that’s good for the nation’s housebuilders. Rupert Hargreaves picks the best buys in the sector.

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Investment Bank Outlook 29-04-2022

CIBCFX FlowsUS$ kicked off the final trading day of April softer, we believe it is just pure profit taking into the long weekend.Its magic. No Japanese rhetoric yet the $YEN weakened for no apparent reason. Started the session at 130.95, the pair slowly declined to 130.365. Call it position adjustment ahead of weekend or month-end clean up. Market participants would still want to buy the dips and likely scatter bids from 130.50 towards 130.00. The biggest question now, one FX reporter wrote that this leaves the authorities to engage in in a degree of damage control via stronger verbal intervention on the weak YEN. A reminder that of illiquid Monday could be their chance to make this happen.AU$, NZ$ GBP$ and EUR$ have strengthened – one AFR article said Treasurer Frydenberg reminded RBA of its plan to wait for wages data due later next month before increasing interest rates. The newspaper said Frydenberg gave the central bank a gentle nudge, which colleagues interpreted as asking the bank to either wait until it meets in June, or to tread lightly if it moves on Tuesday next week. Of course Frydenberg denied. Short-term resistance at 0.7150 which is the 23.6% and then 0.7209 the 38.2% retracement.EUR$ climbed back onto 1.05-handle, not a lot to mention. It is month-end, our macro strategist Jeremy Stretch wrote we remain mindful of leveraged players having already materially extended EUR shorts. While investors remain mindful of broad Euro area macro challenges, political risk has obviously eased since the French Presidential election result. As such, we view significant Eurozone macro negativity as already largely priced in. Very little option strikes on the downside, upside maturity today 1.0565 for €1.96bn, 1.0600 for €840mio, 1.0650 for €700mio and 1.0700 for €2.95bn.Market is expecting s strong Canadian February GDP out tonight. Up 0.7% from 0.2% for the month and up 4.1% from 3.5% for the year. February GDP looks to have been rock solid, part of a Q1 pace that has generally surprised to the upside relative to what was expected when the year began. CAD has outperformed its peers in the G10 space this year. Think we will see position adjustments, sellers lined up above 1.2820, option strike at 1.2850 due today for $740mio.CitiEuropean OpenUSD rally finally runs out of steam as a mix of month-end selling flows and profit-taking emerge, ahead of a cluster of holidays across the Asia region next week. Despite month-end, activity is below average with Japan on holiday, which saw Treasuries closed overnight. AUD, NOK both staged a strong bounce despite a lack of meaningful flow and platform activity showing no strong biases. CNH saw wild swings in thin liquidity, initially sliding given lack of appetite to sit short USD ahead of the long weekend, before swinging to gains as China tech stocks surged on comments out of Politburo meeting and US regulatory progress.Choppiness continues on month-end flow dynamics. We wait for rate decisions in RUB and COP, CPI data for PLN, and employment cost indicator for USD. CHF will not move on SNB speeches. We watch for growth figures in EUR, CAD, CZK, and MXN while JPY may take a breather given the local holiday.USD and Fed officials, while still on blackout ahead of the May FOMC, focus on Q1 Employment Cost Indicator (ECI) data, alongside PCE core deflator figures for March, Friday at 13:30 BST. Citi Economics expects another strong increase in ECI to 1.2%QoQ in Q1, with upside risks from a potentially greater increase in employer provided benefits at the start of the year. Core PCE inflation is likely to rise 0.3%MoM and moderate slightly from 5.4%YoY in February to 5.3%YoY in March, based on already-known elements of CPI and PPI.

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Market Update – April 29

Risk appetite surged as optimism over earnings more than overshadowed concerns over the 8% pop in the y/y GDP price gauge and the -1.4% print on Q1 GDP. The contraction in growth was seen as a one-off, however, due to trade disruptions limiting supply alongside a surge in demand following the pandemic, with inventory drawdowns contributing negatively too. Stock markets remained supported overnight, with hopes of support measures in China helping to underpin sentiment, after China vowed to underpin the health of so-called platform firms.  Meanwhile, the pick-up in core PCE inflation to a 5.2% y/y pace from 5.0% y/y was also seen on the light side and hence supported notions that prices may be topping out.

European Fixed Income Outlook: Bund yields are down -2.5 bp at 0.87% in early trade, with Eurozone bonds paring some of yesterday’s losses and yields coming down as the unexpected stagnation in French GDP at the start of the year highlighted that there are still reasons for the ECB to remain cautious even as inflation is going through the roof. German import price inflation jumped to 31.2% y/y in March, from 26.3% y/y in the previous month.

• Yields are coming down from yesterday’s. The 2-year yield rose over 5 bps to test 2.68% and the 10-year challenged 2.90% before drifting back to 2.63% and 2.85%, respectively.
• Stocks – GER40 and UK100 futures are up around 1.0%, USA100 soared 3.06% on the day, with the USA500 2.47% higher, while the USA30 climbed 1.85%, but all off of late peaks.  Japan is closed for a holiday, the ASX up 1.1% at the close.
• Earnings – Meta shares surge after Facebook ekes out user growth; Qualcomm rises after it forecasts upbeat revenue; Apple Inc , the world’s most valuable company, and e-commerce giant Amazon.com Inc rallied more than 4% ahead of their quarterly reports later in the day.
• USDIndex lost some of its recent gains, currently at 103.15.
• Oil at $106.42. Oil prices meanwhile moved higher as overall confidence improved and fears over China’s Covid measures eased somewhat.
• Gold back above $1900.
• FX markets – EUR and Sterling also found some buyers, but while EURUSD and Cable are up from yesterday’s lows, they are still looking pretty weak at currently 1.0548 and 1.2530 respectively.  USDJPY still held above the 130.

Today – German and Eurozone GDP are still to come and Eurozone inflation data are also due. While in US session eyes are on PCE and Canadian GDP. Exxon and Chevron earnings on tap.

Biggest FX Mover @ (07:30 GMT) XAGEUR (+1.27%) breached 22.20. MAs pointing higher, MACD signal line & histogram turned positive , RSI at 62, all signalling further boost in the near term. H1 ATR 0.077, Daily ATR 0.509.

Click here to access our Economic Calendar

Andria Pichidi

Market Analyst

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in Leveraged Products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distribution.

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Daily Market Outlook, April 29, 2022

Daily Market Outlook, April 29, 2022 Overnight Headlines China And U.S. Negotiate On-Site Audit Checks As Delistings Loom RBA To Raise Rates To 0.25% On Tuesday, To End Year At 1.50% - RTRS Poll More UK Companies See Price Increases Even As Economy Slows Dollar Towers At Two-Decade High On Growth Woes, Fed Outlook Goldman Sees Yen Falling Further With Or Without Intervention Australian Bonds Attract As RBA Hike Bets Overdone, JBWere Says Oil Heads For Longest Run Of Monthly Gains Since 2018 Diesel Squeeze Intensifies As Traders Scramble To Exit Shorts Asia Shares Brace For Worst Month In 2 Yrs On Growth Fears Apple Shares Dip After Company Warns Of A Possible $8 Billion Hit Amazon Results And Outlook Fall Short As Warehouse, Fuel Costs Soar Intel Forecasts Gloomy Quarter On Supply-Chain Woes, Shares Fall Musk Sold Billions Of Dollars In Tesla Stock After Agreeing To Buy TwitterThe Day Ahead Eurozone inflation likely edged higher this month, according to economists, who predict that the economy in the currency area grew again in the first quarter. Headline consumer price growth this month is expected to tick up to an annual rate of 7.5% from the all-time high of 7.4% in March. The core rate is also poised to set another record of 3.1% following last month’s historic peak of 2.9% Quarterly GDP growth in the three months to March is forecast at 0.3%, the same rate reported for the previous period, with the annual rate expected to rise to 5.1% from 4.6%. Much higher quarter growth was expected in the final three months of 2021, but the German economy contracted 0.7% in the timeframe. The Bank of Japan’s yield-curve control policy is weighing so heavily on the yen that intervening in the market to buy the currency would have little impact, according to Goldman Sachs Group Inc. strategist Karen Reichgott Fishman. “We find it hard to see intervention driving a sustained appreciation,” she wrote in a note, adding that rising U.S. yields should keep pushing the yen lower. Still, Fishman sees a “high risk” of the Finance Ministry instructing the BOJ to go into the market to buy the yen if the depreciation continues. Wild swings have been a hallmark of the U.S. stock market all year. It’s only gotten worse during the latest earnings period. Stocks rallied as much as 3% Thursday on the back of strong results from technology heavyweights. Meta Platforms Inc. surged 18%, while PayPal Holdings Inc. and Qualcomm Inc. each jumped more than 10% just two days after gloomy outlooks led to the biggest market selloff in seven weeks. In late trading Amazon.com Inc. plunged 10% and Intel Corp. lost 5% after disappointing forecasts. The outsize swings continued a stretch that’s seen the average S&P 500 stock move 4.2% in either direction after reporting earnings this quarter, the most since the last period of 2011, according to data from Goldman Sachs Group Inc. That compares with an average price change of 3.4% in the prior 65 quarters. USD and Fed officials, while still on blackout ahead of the May FOMC, focus on Q1 Employment Cost Indicator (ECI) data, alongside PCE core deflator figures for March, Friday at 13:30 BST. Citi Economics expects another strong increase in ECI to 1.2%QoQ in Q1, with upside risks from a potentially greater increase in employer provided benefits at the start of the year. Core PCE inflation is likely to rise 0.3%MoM and moderate slightly from 5.4%YoY in February to 5.3%YoY in March, based on already-known elements of CPI and PPI. CitiFX Quant team’s asset rebalancing model points to a rotation out of bonds and into equities, particularly US equities, with these expectations potentially contributing to Thursday’s squeeze higher in S&P (+2.96%). Month end falls trading session may see keep price action choppier than usual, particularly as we head into the FOMC and other top tier events next week.FX Options Expiring 10am New York Cut EUR/USD: 1.0400 (456M), 1.0450 (297M) 1.0565-75 (2.2BLN), 1.0600 (838M), 1.0650 (688M) 1.0700 (2.94BLN). USD/JPY: 128.40 (230M) EUR/GBP: 0.8475 (751M) AUD/USD 0.7100-10 (385M), 0.7200 (453M), 0.7250 (486M) USD/CAD: 1.2695-00 (649M), 1.2850 (740M)Technical & Trade ViewsEURUSD Bias: Bearish below 1.0950 Bullish above Firmer into month end rebalancing and EZ data dump +0.1%, in a 1.0492-1.0530 range, as the USD eased in a low key session Apple, Amazon and Intel delivered cautious outlooks - may hit risk in NY Big moves in April suggests potential volatility on month end rebalancing Raft of European GDP and inflation data will gauge EZ economic health Charts; 5, 10 & 21 daily, weekly and monthly moving averages fall 21 day Bollinger bands and daily momentum studies head lower Bearish setup targets the long term 1.0340 low in January 2017 Close above 1.0799 21 day moving average needed to undermine downsideGBPUSD Bias: Bearish below 1.30 Bullish above. Touch firmer into a likely volatile month end +0.1% in a 1.2455-1.2496 range with only moderate month end flow Sterling and EUR/GBP often volatile on month end rebalancing after big moves Almost 60% of UK companies plan to raise prices in 2022 BoE to walk a fine line between inflation and recession May 5 Charts; momentum studies, 5, 10 & 21 day moving averages head lower 21 day Bollinger bands expand - strong bearish trending setup Targets a test of the 1.2360 low in July 2020 then 1.2252 June 2020 base Close above 1.2774 10 day moving average would undermine downside biasUSDJPY Bias: Bullish above 125 Bearish below Drops briefly on position adjustments; downside limited USD/JPY down 0.1% in Asia, mild profit-taking dip ahead of w/e pounced on Friday range of 130.95-130.36; liquidity constrained due to Japan holiday Buyers emerge ahead of 130.00, previous psychological resistance now support BOJ commitment to ultra-easy policy will continue to undermine JPY BOJ policy in contrast to Fed which is racing to raise rates Choppy week ahead, traders brace for Fed with Japan closed Tuesday-Thursday Break above 130.57, 76.4% Fibo of 1998-2011 USD decline technically bullish Immediate resistance at 131.25 Thursday high; support 130.35-40, 130.00-10AUDUSD Bias: Bullish above .7300 Bearish below Posts minor gains as focus shifts to a RBA rate hike AUD/USD rallies 0.4% in Asia after suffering a bruising 2.6% weekly fall Has held up relatively well despite rampant USD strength; RBA awaited Tue RBA hike of 0.15% priced in; will be 1st rate rise in Australia in a decade Global growth slowdown, prospects of aggressive Fed rate hikes limit rallies Weak CNY on China growth concerns amid COVID-19 lockdowns dent AUD sentiment Range of 0.7090-0.7138 Friday; resistance 0.7145-50, 0.7165-70 Support 0.7085-90, 0.7050-55; loss of latter opens test of 0.7000-05

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Share tips of the week – 29 April

MoneyWeek’s comprehensive guide to the best of this week’s share tips from the rest of the UK's financial pages.

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Mohamed El-Erian: inflation, disinflation and the mistakes of central bankers

Merryn talks to economist Mohamed El-Erian about the state of the global economy, how the Fed became hostage to the marketplace, and how you should position your investments in distorted markets.

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Macron has failed France – but there is still plenty to invest in

Emmanuel Macron won a convincing victory in France's presidential election, but he has no clear vision for halting the country’s decline. Frédéric Guirinec looks at the state of France and picks 20 French stocks to buy.

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Gold shows its mettle as a safe haven at last

Gold has proved its worth as a safe haven, gaining 9% since the start of the year and recently finishing its best quarter in nearly two years.

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The race to put art on the moon

Two space cadets are hoping for a big pay day by putting works of art on the moon. Chris Carter reports

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Macron has failed France – but there is still plenty to invest in

Emmanuel Macron won a convincing victory in France's presidential election, but he has no clear vision for halting the country’s decline. Frédéric Guirinec looks at the state of France and picks 20 French stocks to buy.

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Which mistake will central bankers choose to make next?

The heads of the Bank of England and the US Federal Reserve have choices – but none of them are good choices, says Merryn Somerset Webb.

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Apple Earnings – Expectations are for continued growth

The largest company on Wall Street, Apple inc., will present its quarterly report today after the closing bell. Apple, with a market capitalization of $2.5 trillion, has beaten Wall Street expectations ever since taking over from Microsoft as the most valuable company.

CNN Business

Although Apple did not give any projections for the 2nd quarter of fiscal 2022 due to uncertainty about the post-Covid-19 impact, investors still see Apple as a strong company and expect Apple to continue to report strong business growth this quarter. Apple has consistently reported financial reports that outperformed market projections for the year ending 2021. While Apple struggled somewhat in smartphone sales, good improvements in the serviced business sector covering APP Store, Apple Music, iCloud and others helped boost Apple’s business. Apple’s portfolio in non-phone sectors such as Mac, iPad is also expected to increase in this 2nd quarter report. The market is now projecting Apple to report revenue of $ 94.0 Billion, an increase of more than 5% ($ 77.1 billion) over the same quarter last year. Meanwhile, earnings per share (EPS) for the 2nd quarter is projected at $ 1.42 per share, an increase of more than 2 cents from $ 1.40 reported in the same quarter last year. There is little concern that the movement control (lockdown) order in China will affect Apple’s supply chain, where nearly half of Apple’s device suppliers are affected. It is not expected to affect the financial reporting for this quarter, instead it is likely to have an impact in the next quarter. With Apple’s latest product just launched, the self-service phone repair shop, it is expected to continue to help Apple in maintaining business growth and remain a giant on Wall Street.

Apple shares (MT5: #Apple) for 2022 are on somewhat of a roller coaster following geo-political factors and high inflation. Apple shares hit a high of $182.87 in early January before falling to $150 following the Russia-Ukraine geo-political crisis. It bounced back to $180 at the end of March and retreated in April and is now trading at $156.50 on April 27. Apple shares are now trading below the 50- and 200-day MA with the RSI-14 moving closer to oversold levels, while the MACD signal line has also broken below 0. Market analysts suggest Apple shares are still in the Buy category. Apple’s stock outlook for the next 12 months is forecast at a median of $191.00, + 24% compared to current prices.

Click here to access our Economic Calendar

Tunku Ishak Al-Irsyad

Market Analyst – HF Education Office Malaysia

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in Leveraged Products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distribution.

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Oats Futures ( ZOK2022), H1 Potential for Bullish Rise

Type: Bullish RiseKey Levels:Resistance: 695'7Pivot: 664'7Support: 645'7Preferred Case:We are expecting the price to potentially rise from our pivot level of 664'7 in line with 78.6% Fibonacci retracement towards our 1st resistance level of 695'7 which is in line with 38.2% Fibonacci retracement and 78.6% Fibonacci projection.Alternative Scenario:Otherwise, the price might break our pivot structure and trigger a dip to the 1st support level of 645'7 which is in line with 161.8% Fibonacci extension.Fundamentals:No major news.

from Tickmill Expert Blog - Forex Traders Blog https://www.tickmill.com/blog/oats-futures-zok2022-h1-potential-for-bullish-rise"
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Exxon and Chevron: Q1 earnings forecasts

Exxon Mobil Corporation and Chevron Corporation, two integrated energy giants, are scheduled to report their Q1 2022 earnings  on Friday, April 29, 2022, before the market opens. Following the sharp increase in energy prices in the first quarter, mostly due to the Russian invasion of Ukraine, the market is expecting excellent earnings reports for both companies. Compared to the prior-year quarter, Zacks expects Exxon’s Q1 earnings to grow 48.08% to $87.59 billion from $59.15 billion, its highest earnings since 2015, and the expected return on share to increase 246.15% to $2.25 per share from $0.65 per share.

Meanwhile, the forecast for Chevron’s earnings compared to the same quarter last year is for 45.23% growth to $41.51 billion (from $32.03 billion), but down from $48.13 billion in Q4 2021. Return per share is expected to rise 282.22% at $3.44 per share, the highest in around 10 years.

The earnings report usually only has a short-term impact on the stock price. While the start of Q2 2022 with USOil prices above $100.00 per barrel was a good prospect for oil producers, the appreciation of the US Dollar due to the Fed’s accelerating rate hike in May has put major pressure on oil prices alongside the war in Ukraine, which could affect both the oil supply in the market and the economic recovery. In addition,  Covid-19, will continue to be a drag on the global economic recovery this year.

Technical Analysis

Exxon and Chevron’s share prices have moved differently ahead of the earnings call. This is in line with RBC Capital Markets upgrading Exxon and downgrading Chevron last week. As a result, Exxon’s share price is now able to hold above the 50-day MA, while Chevron’s share price has closed below the 50-day MA for the third day as the pair’s price chart begins to see a continued bearish divergence.

Exxon Mobil Corporation

Overall, #ExxonMobil prices remain optimistic ahead of the Q1 earnings report, with prices now holding above the 50-day MA and MACD remaining above the 0 line with key resistance at the former high of $91.00 and Fibo 161.8 level at $101.30. If earnings do not meet expectations, there will be first support at $75.50 and next at the 200-day MA at $68.00.

#Chevron

The #Chevron short-term outlook is negative. The price is currently below the 50-day MA (but supported by ascending triangle lower trendline) while  the MACD histogram is falling towards the 0 line. A break below trendline and the $147.00 level could retest the Fibonacci extension at 161.8 level at $143.00 and at 261.8 level. The latter confluence with the 200 day MA at the $123.50 zone, while the key resistance is at the previous high at the $175.00 zone.

Click here to access our Economic Calendar

Chayut Vachirathanakit
Market Analyst – HF Educational Office – Thailand

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in Leveraged Products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distribution.

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Market Update – April 28 – USD Dominates with FX Markets in Focus

USDJPY rockets higher 130.00 in the cross-hairs as BOJ leaves main policy steady, to hold 10yr JGB ceiling at 0.25%, JPY clobbered across the board again. AUDJPY back to 92.00, GBPJPY 162.00 EURJPY 136.40. The markets continued to mull the implications of the stand off between the EU and Russia over payment modalities for Russian gas deliveries.

• The front on a gradual ban of Russian oil imports has hardened, as Russia upped the ante, but while the EU urged a united front on Russian demands for ruble payments, the European Commission last week seemed open to companies finding ways to tally Moscow’s demands with the EU’s sanctions against Putin and that is what many companies are doing now. In the end it seems unlikely that gas supplies to the EU will stop immediately, although governments will work even harder to get independent of Russian deliveries as soon as possible.
• The 10-year Treasury yield is down –1.1 bp to 2.82%, while JGBs were supported after the BoJ
• Stocks – ASX lifted 1.2%, the Hang Seng 0.5%, but the CSI 300 is currently down -0.4%, with Covid developments still in focus. US futures are also higher, with a 1.3% rise in the USA100 leading the way.
• Earnings – Strong earnings from Microsoft and Visa. Facebook owner Meta beat Wall Street forecasts and said it had eked out user growth, sending its shares up almost 20% after hours. Microsoft MSFT.O shares rallied as well. Google-parent Alphabet Inc GOOGL.O fell 3.6% as slowing YouTube ad sales pushed quarterly revenue below expectations. Boeing Co BA.N dropped 7.5% after it disclosed $1.5 billion in abnormal costs from halting 777X production.
• USDIndex the main leader, at 103.70 highs.
• Oil is currently trading at $101.08, with yesterday’s gains already erased. – China’s capital Beijing closed some public spaces and stepped up checks at others on Thursday, as most of the city’s 22 million residents embarked on more COVID-19 mass testing aimed at averting a Shanghai-like lockdown.
• Gold drifts to $1885.
• FX markets – Developments are hurting the EUR, which has dropped below 1.0500, while EURGBP fell towards the 0.8394 mark. GBPUSD is also under pressure though amid general dollar strength. AUD and NZD were on the ropes as worries about a recession in Europe and a slowdown in China engulfed risky assets and overwhelmed the promise of rising interest rates at home.

Today – Inflation reports for Germany and Spain are due today, as well as confidence data for Italy.

Biggest FX Mover @ (07:30 GMT) CADJPY (+1.68%) Breached 101.90. MAs pointing higher, MACD signal line & histogram moving higher, RSI at 82, all signalling further boost in the neat term. H1 ATR 0.277, Daily ATR 1.15.

Click here to access our Economic Calendar

Andria Pichidi

Market Analyst

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in Leveraged Products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distribution.

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Daily Market Outlook, April 28, 2022

Daily Market Outlook, April 28, 2022 Overnight Headlines Australia Banks Pull Forward Hike Calls After Inflation Surprise China Cabinet Split Over Opening Stimulus ‘Flood Gates’ Treasury Yields Extend Slide Amid Signs Of Extreme Bearishness Deutsche Bank Sees 5%-6% Fed Target Rate And U.S. Recession Euro Falls To Five-Year Low Against Dollar As Growth Risks Eyed Oil Rises On Russia Gas Tension, China Stimulus Hopes Stocks Extend Sell-Off, Dollar Firm On Global Growth Fears Microsoft Waves Off Macroeconomic Worries With Bullish Forecast Alphabet’s Earnings Decline As YouTube Revenue DisappointsThe Day Ahead .Asian equity markets are mostly up this morning although Chinese indices are down. Some positive news for the US tech sector has been cited as support. Pledges of economic support from China alongside signs that the Covid outbreaks in Shanghai and Beijing may be stabilising have also helped boost sentiment. These seem to have outweighed concerns about Russian intentions regarding gas exports. US President Biden will speak about Ukraine today. The Bank of Japan left monetary policy unchanged today and generally maintained a ‘dovish’ stance with its latest update. Today’s German consumer price data for April will provide some clues on tomorrow’s update for the Eurozone as a whole. Annual inflation is expected to fall modestly from March’s level, although on a EU-harmonised basis it is expected to be unchanged. Look for tomorrow’s reading for the Eurozone to show a fall. Meanwhile, Eurozone economic confidence data for April will provide an update on the impact of the Ukrainian crisis on sentiment in the region. The first estimate of US Q1 GDP is expected to show a sharp slowdown in annualised quarterly growth to 1.3% compared with 6.9% in Q4, due to a combination of weaker inventory growth and strong import growth. However, the domestic final demand component is expected to grow more strongly than in Q4, and overall GDP growth is forecast to accelerate in Q2. This morning’s monetary policy announcement from the Swedish Riksbank is not expected to result in an immediate change in interest rates. However, recent comments from the central bank’s head suggests that they may now be close to hiking interest rates. That has led to speculation that rates may be raised following the next meeting on 30th June. Today’s update will be watched for a signal that this is likely, while in the meantime a reduction in its asset purchase programme is expected to be announced. The Lloyds Bank Business Barometer ‘s April update will be released early Friday. In March, it showed the biggest fall in business confidence since the early days of the pandemic. Confidence was down in three-quarters of the UK’s regions and nations, and across all sectors. Both pay and price inflation pressures continued to build, reflecting a tight labour market and pressure to pass on higher costs. Ahead of next week’s monetary policy update from the Bank of England, the data will be watched for any signs that these pressures are easing.FX Options Expiring 10am New York Cut EUR/USD: 1.0650 (309M), 1.0700 (567M) USD/JPY: 128.00 (405M), 129.00 (220M), 129.25 (250M) AUD/USD: 0.7060 (225M), 0.7080 (299M), 0.7100 (361M) 0.7150 (205M), 0.7250 (241M), 0.7400 (1.36BLN) NZD/USD: 0.6540-50 (402M). EUR/GBP: 0.8405-15 (293) USD/CAD: 1.2650-60 (1.9BLN), 1.2700 (401M), 1.2750-60 (831M) 1.2770-75 (490M), 1.2800 (261M), 1.2860 (387M) EUR/CHF: 1.0295 (213M)Technical & Trade ViewsEURUSD Bias: Bearish below 1.0950 Bullish above Testing Wednesday low as USD buying continues in Asia EUR/USD opened -0.73% at 1.0559 after USD broadly moved higher It came under pressure when USD/JPY moved up early and traded to 1.0530 USD firmed again late morning when USD/CNH surged and EUR/USD fell through 1.0520 Heading into the afternoon it is close to the session low at 1.0512 Talk of a 1.0500 option barrier may discourage aggressive selling There isn't any decent support ahead of the 2017 low at 1.0340 Only a break above the 10-day MA at 1.0729 would ease downward pressureGBPUSD Bias: Bearish below 1.30 Bullish above. GBP/USD trades below 1.25 for first time since July 2020 Cable hit new 21-month low of 1.2492 at 0544 GMT after breaking below 1.25 1.2535 = subsequent rally high, courtesy of some profit-taking on shorts GBP/USD was above 1.30 before UK retail sales data miss last Friday Safe-haven USD supported by geopolitical news and Fed expectations Putin warns West of lightning retaliation for intervention in UkraineUSDJPY Bias: Bullish above 125 Bearish below USD/JPY through 130.00 option barriers, big question looms Afternoon Asia trade sees USD/JPY break above 130.00, to 130.27 EBS Large option barriers at 130.00 knocked-out, stops above tripped Question on most minds where will Japanese officials draw the line Many spec targets achieved, threat of actual intervention towards 135? Speed of JPY weakness, volatile market not lost on Japan official-dom More option barriers tipped every 50 ticks from 130.50 USD/JPY highest since 133.84 in Apr 2002AUDUSD Bias: Bullish above .7300 Bearish below Under pressure as USD strengthens led by USD/JPY AUD/USD opened unchanged at 0.7126 after topping out at 0.7190 After trading at 0.7127 it eased to 0.7110 as USD remained in broad demand Buoyant risk assets encouraged some buying but sellers above 0.7120 capped A jump higher in USD/CNH sent AUD/USD lower again and it fell below 0.7110 AUD/USD traded 0.7097 before settling 0.7105/10 into the afternoon There is minor support at the Feb 24 low at 0.7094 Next level of decent support is at the 2022 low at 0.6967 Resistance is at the 10-day MA at 0.7273 and 200-day MA at 0.7295 AUD/USD vulnerable while global growth concerns persist

from Tickmill Expert Blog - Forex Traders Blog https://www.tickmill.com/blog/daily-market-outlook-april-28-2022"
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Indonesia aims to step up its economic growth

Indonesia's economic growth has lagged that of neighbours such as the Philippines and Vietnam. But soaring commodity prices could change that.

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Why food and fuel subsidies will push up debt

Many governments have adopted subsidies or tax breaks to shield households and businesses from rising food and fuel prices. But that's just causing government deficits and debt to balloon.

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The bond-market bloodbath isn’t over yet

The bond-market sell-off isn’t done by along chalk – rising interest-rates could yet push yields higher.

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The truth about market manipulation

Free, fair and transparent markets are a fiction. Investors need to be alert to the flaws, says Jonathan Compton.

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Putin Cuts Gas Supply to Poland & Bulgaria

Putin Backs Up ThreatsRussia has this week followed through on its threat to sever gas supplies with countries refusing to meet Putin’s demand that gas payments be made in Rubles. Gas supply to Poland and Bulgaria has been switched off in light of both countries refusing to satisfy Putin’s demands. With further payment deadlines from other countries in Europe due this week, there is a very strong likelihood that we see gas supply reduced even more.Gas Prices Spike HigherGas prices have spiked higher in response to the news, with speculators driving price higher in anticipation of further supply “switch-offs” coming imminently. While EU member states had initially agreed in principle to refuse Putin’s requests, developments last week suggested room for a potential compromise, to allow EU states to continue receiving Russian gas. However, in light of this latest aggression, such a compromise appears less likely.First Major Disruption In Over A DecadeThe turning off of supply to Poland and Bulgaria marks the first time that energy supplies to Europe has been halted since the Russia-Ukraine energy price dispute in 2006 and 2009. Commenting on the move, Polish leaders reassured citizens that they have enough reserve supplies so that consumers will not be negatively impacted near term. Bulgaria, however, said that it only has enough supplies for the next month or so.EU Leaders Meeting TodayEU leaders are due to meet later today to discuss next steps with regards to the possibility of banning Russian energy imports into the customs bloc. EU leaders have been highlighting the need to develop independence from Russian energy and reduce the leverage Putin has over Europe with regards to energy supply. In light of the announcements this week there is the potential that the EU seeks to retaliate. However, given that many member states are still far away from energy independence, it is unclear how much room there is for a counter move.EUR Taking A HitEUR has come under heavy selling pressure following news of the energy supply disruption. Fears of the impact on the overall eurozone economy of the ongoing Ukraine-Russia conflict have been a major headwind for EUR this year, with little sign of a rebound near term.Technical ViewsNatural GasThe correction lower from the 8.202 level has seen Natural Gas prices finding strong support into the 6.516 level. With momentum indicators moving higher off lows, and while this support level holds, the focus is on a continuation higher near term. Below 6.516, the next key support to note is the 5.881 level.

from Tickmill Expert Blog - Forex Traders Blog https://www.tickmill.com/blog/putin-cuts-gas-supply-to-poland-and-bulgaria"
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PayPal Earning Report

PayPal’s first-quarter 2022 earnings report is scheduled to be released today after market close. This guide will predict the company’s first-quarter earnings report based on the company’s last quarterly report. PayPal announced its fourth-quarter profits for 2021 on February 1, 2022. For the first time, the business exceeded $1 trillion in annual TPV, concluding the year with $1.25 trillion in total payment volume. Additionally, it handled 5.3 billion transactions in the fourth quarter, a 21% increase over the previous quarter.

The firm gained 49 million customer accounts throughout the year, bringing the total to 426 million at the end of the year. The engagement metric of transactions per active account climbed by 11%, a 10% increase over 2020 [1].The average number of transactions per active account has grown to 45 this year, an increase of 11% compared to last year’s $5.4 billion in annual free cash flow. In the fourth quarter, total payment volume climbed by 23% to $340 billion.

In the third quarter, eBay volumes decreased 45% to 2.7% of total sales, down from 6% the previous year. Volumes climbed by 28% on a currency-neutral basis when eBay was excluded. In the fourth quarter, revenue increased 13% to $6.9 billion [2]. “We still have the eBay transfer to complete. This change obscures some of the business’s inherent strength,” Dan Schulman, CEO of PayPal, said [3].He noted that eBay presented  $1.4 billion in sales last year, and that amount should be closer to $600 million this year. By the third quarter, PayPal will no longer be required to adjust its eBay results.

Cross-border volumes and small company merchants were disproportionately affected by supply chain issues, with inflation affecting expenditures in some parts of PayPal’s customer base.

Growing COVID variant risks resulted in a decline in travel and event bookings, and the government stimulus cut had an impact as well. Despite a solid two-year growth rate of more than 50%, e-commerce growth rates were lower than industry predictions over the Christmas season.

Quarter 1 2022 sales expectations range between 6.3 billion and 6.5 billion dollars, with an average of 6.4 billion dollars. Earnings per share projections for Quarter 1 2022 vary from 0.82 cents to 0.97 cents, with a mean expectation of 0.88 cents.

 Source: money.cnn

Additionally, PayPal said that it intends to add between 15 million and 20 million new accounts this year, reducing its earlier target of 750 million total accounts.PayPal anticipates revenue growth of 15% to 17% in 2022 on a spot and foreign-currency-neutral basis. Analysts forecast a 17.9% year-over-year growth in revenue in 2022 [4].

PayPal Stock Analysis

PayPal (PYPL) has been declining since the beginning of the year. The stock has fallen more than 56% so far. PYPL is now trading at 87.03, having just broken below the weekly inside bar. On the daily chart, the price is far below the 100-day moving average, and the MACD is trending downward, indicating a negative trend.

PYPL’s next resistance level is around 107.59. That happens to be an imbalance. If it breaks through this level, the stock may go towards 115.17. On the other side, the stock’s support level is located at about 81.39. If the price breaks through this level, it may continue to fall toward 68.81 [5].

1. https://s1.q4cdn.com/633035571/files/doc_financials/2021/q4/Q4-FY-21-PayPal-Earnings-Release.pdf
2. https://s1.q4cdn.com/633035571/files/doc_financials/2021/q4/Q4-FY-21-PayPal-Earnings-Release.pdf
3. https://www.cnbc.com/2022/02/01/paypal-pypl-q4-2021-earnings.html
4. https://s1.q4cdn.com/633035571/files/doc_financials/2021/q4/Q4-FY-21-PayPal-Earnings-Release.pdf
5. https://finance.yahoo.com/quote/PYPL/chart

 

Click here to access our Economic Calendar

Adnan Rehman

Market Analyst

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in Leveraged Products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distribution.

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Investment Bank Outlook 27-04-2022

CIBCFX Flows$YEN had a very brief visit to 126.965 early this morning, there was no headlines so we believe it was positioning in thin market. $YEN headed higher after Tokyo opened, yields of UST also gained. Good demand for the Tokyo fix sent the pair to 127.64. Activity slowed soon after, $YEN drifted lower. $YEN rose again into the Tokyo lunch hour.We witnessed good two-way interests in $CAD before and after the Toronto closed. It was first paid up from 1.2825 up to 1.2833, likely to be linked to ETFs. Once that was over, the pair was sold down to 1.2805. Buying resumed out of North Asia and was again sold as we approach the Tokyo fix. We will have Canadian February payroll tonight plus CFIB business barometer, monthly GDP on Friday.Australia Q1 inflation data was hot and is boosting a central bank election rate hike. Trimmed mean CPI rose 1.4% over the quarter and 3.7% over the year, our macro strategist said the case for RBA hiking is weak because inflation is clearly above target, wages data is sought and is an out for the Bank. Patrick believes RBA will move next week. The AFR said Q1 inflation was always expected to be high but today’s release exceeded all expectations, increasing breath of inflationary pressures and growing upstream disruptions in China means that May board meeting in play for rate hike. AU$ which has been climbing since the start jumped to 0.7171 on the data. There was no follow-through, back below 0.7150. Will the EUR$ break 1.0600? Recycling of intervention US$ could help. Once that clears, traders will take aim for 1.0570, low of April 2017. Then again, put strike at 1.0600 rolls off today worth €1.41bn could prevent the move. A weaker could drive Eurozone inflation higher, which will come into focus this Friday. However, ECB’s cautious policy stance will appear more detached while the Fed is taking action to curb inflation.$THB rally stalled at 34.35. Yesterday, BoT warned that it is closely monitoring the price action and is ready to take action if moves become volatile. Well, weaker THB due to Fed tightening, China’s lockdowns and dividend. I doubt aggressive actions, most likely, smoothing. Thai government confirmed that on May 1, fully vaccinated travellers to enter without having to quarantine and RT-PCR Covid-19 test upon arrival. Technically, 34.20 is the new support, stronger at 34.00. Topside 34.50.Credit AgricoleAsia OvernightWeak US technology stock earnings and the ramping of energy supply tensions in the EU weighed on sentiment in Asian trading. In a warning shot to the rest of the EU, Russia has cut off gas supplies to Poland and Bulgaria, which refused to meet Russia’s demand to pay for gas in RUB. Providing sentiment with some relief was a pledge by China to ramp up infrastructure construction spending in order to help support its economy. HK and China bourses bucked the general trend in Asia on rallies, but the rest of Asian equities were trading in the red at the time of writing. S&P 500 futures were trading higher at the time of writing. Strong Australian inflation data and modest risk-on trading in G10 FX led to the AUD outperforming and the JPY underperforming during the Asian session.

from Tickmill Expert Blog - Forex Traders Blog https://www.tickmill.com/blog/investment-bank-outlook-27-04-2022"
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USDCHF H4 | Potential Bearish Reversal

Type: Bearish ReversalKey Levels:Resistance: 0.97979Pivot: 0.96372Support: 0.94604Preferred Case:We expect that price will potentially reverse from pivot level of 0.96372 in line with 161.8% fibonacci extension and -61.8% fibonacci expansion towards the 1st support level of 0.94604 in line with 38.2% fibonacci retracement.Alternative Scenario:Alternatively, price might break the key pivot level and head towards the 1st resistance level of 0.97979 in line with previous horizontal swing high resistance.

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AUDUSD H4 Potential For Bullish Continuation

Type: Bullish BounceKey Levels:Resistance: 0.72462Pivot: 0.71182Support: 0.65361Preferred Case:We see the potential of a bullish continuation from pivot level of 0.71190 in line with 78.6% fibonacci retracement and 100% fibonacci projection towards the 1st resistance level of 0.72476 in line with 38.2% fibonacci retracement and 100% fibonacci projection.Alternative Scenario:Otherwise, price might break the key support level to trigger a dip towards the 1st support of 0.70553 which is in line a previous horizontal swing low support.

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Market Update – April 27 – Aggressive central bank moves hanging over markets

Concern over aggressive tightening moves has resurfaced and Australia’s 10-year yield declined, as the short end of the curve was pressured by a jump in headline inflation which lifted to 5.1% y/y in Q1 – the highest level since the introduction of the Goods and Services Tax in the early 2000s. Stocks struggled not surprisingly struggled, although mainland China bourses finally bounced back. Gold was back in demand temporarily and Oil prices backed up, with the USOIL at $102.46 now. The Yen sold off, while the USDIndex is moving further above the 102 level. Russia halts gas supplies to Poland and Bulgaria.

• The 10-year Treasury yield is up 4.4 bp, with the curve flattening as the short end underperformed.
• Stocks – Nikkei and ASX meanwhile corrected -1.2% and -0.8% respectively with tech stocks under pressure after the weaker close on Wall Street yesterday. USA100 cratering -3.95%. The USA500 dropped -2.81% and the USA30 sunk -2.38%. GER40 and UK100 are slightly higher at the moment, but underperforming versus US futures.
• Earnings have been mixed but the advent of the key reports ahead left a very cautious environment. While a lot of reports have been better than expected, Q2 outlooks have been cut while guidance has been uncertain. Alphabet was down about 3% , GE disappointed and was the poster child for the headwinds, revealing problems supply chains, rising costs, and shortages of materials and labor.
• USDIndex remains on bid, at 102.52 highs.
• Oil spiked to 102.96, as Russia, which has been demanding payments for its gas in roubles as sanctions over its invasion of Ukraine bite, said it will halt supplies to Poland and Bulgaria from Wednesday.
• Gold back below the $1900
• FX markets – USDJPY took over the 128 mark again, EURUSD extents to 1.0615, GBPUSD steady to the downside at 1.2558, USDCAD to 1.2828 highs.

Today – ECB’s President Lagarde speech , BoC’s Rogers speech, BoC’s Governor Macklem speech.

Biggest FX Mover @(07:30 GMT) AUDJPY (+1.29%) Breached 92. MAs flattened, MACD signal line & histogram moving higher close to neutral zone, RSI at 45 , all signaling a pullback. H1 ATR 0.305, Daily ATR 1.195.

Click here to access our Economic Calendar

Andria Pichidi

Market Analyst

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in Leveraged Products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distribution.

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Daily Market Outlook, April 27, 2022

Daily Market Outlook, April 27, 2022 Overnight Headlines Australia Banks Pull Forward Hike Calls After Inflation Surprise China Cabinet Split Over Opening Stimulus ‘Flood Gates’ Treasury Yields Extend Slide Amid Signs Of Extreme Bearishness Deutsche Bank Sees 5%-6% Fed Target Rate And U.S. Recession Euro Falls To Five-Year Low Against Dollar As Growth Risks Eyed Oil Rises On Russia Gas Tension, China Stimulus Hopes Stocks Extend Sell-Off, Dollar Firm On Global Growth Fears Microsoft Waves Off Macroeconomic Worries With Bullish Forecast Alphabet’s Earnings Decline As YouTube Revenue DisappointsThe Day Ahead Asian equity market performance is mixed this morning. Many markets are down seemingly reflecting concerns about the news that Russia has cut off gas flows to Bulgaria and Poland, which has fanned fears of a wider halt of supplies to Europe. However, Chinese indices are up following President Xi’s call for “all out” efforts to boost infrastructure constriction. In Australia, Q1 annual CPI inflation rose by a higher-than expected 5.1% (from 3.5% in Q4). The Japanese government announced a package of measures to combat rising inflation. Today’s economics calendar is light. The CBI retail survey will provide one of the first gauges of April sales. Last week’s official data for March saw retail sales decline for the third time in four months. Some of that weakness may represent households spending more on consumer services, which are not included in the retail sales measure, as Covid restrictions end. However, there are concerns that the drop also represents the impact of rising inflation eating into consumers’ spending power and a further share decline in GfK measure of consumer confidence for April will have done nothing to ease those fears. Consequently, the CBI report will be watched for more signs of weakness in April. In the US, pending home sales for March will provide further indications of whether concerns about higher interest rates are already starting to impact on the housing markets Pending sales as of February had fallen four consecutive months and were more than 5% lower than a year ago. That may exaggerate the extent to which sales weakened and so today’s data may surprise on the upside. However, there seems no doubt that a sector that is particularly interest rate sensitive should be one of the first to be impacted. Early tomorrow, the Bank of Japan will give its latest monetary policy update. It is not expected to make any immediate policy changes. However, of particular interest will be whether it has anything new to say about this year’s sharp slide in the Japanese yen. There has been speculation in markets that the BoJ may tweak its ‘forward guidance’ to signal a higher probability that interest rates may be raised in the not-too-distant future. In the Eurozone, European Central Bank head Lagarde is set to speak but her remarks may not touch on monetary policy.FX Options Expiring 10am New York Cut USDJPY - 129.50 440m. 129.00/10 670m. 127.50/70 1.00bn (603m C). 127.00/10 650m. 126.70 540m. EURUSD - 1.0900/10 1.75bn (1.54bn P). 1.0800 1.45bn (1.19bn P). 1.0750/60 618m. 1.0700/10 1.16bn (1.11bn P). 1.0650 409m. 1.0600 1.41bn (P). 1.0500 769m. GBPUSD - 1.3000 1.19bn (P). 1.2900 1.10bn (P). AUDUSD - 0.7450 1.86bn (C). 0.7360/70 724m. 0.7340/50 470m. 0.7130/50 688m. 0.7090/0.7100 447m. NZDUSD - 0.6830 1.83bn (1.50bn P). 0.6730 1.38bn (1.10bn P). USDCAD - 1.2470/80 566m. USDCHF - 0.8550 600m. 0.9300/10 1.32bn (1.14bn P). USDMXN - 20.10 745m. USDCNH - 6.65 400m. 6.50 700m.Technical & Trade ViewsEURUSD Bias: Bearish below 1.0950 Bullish above Remains under pressure and clings to 2020 low EUR/USD opened -0.70% at 1.0637 after EUR fell against USD and JPY It tried to rally early Asia before running into sellers at 1.0652 EUR/USD traded to a 5-year low at 1.0633 but there was no follow-through Heading into the afternoon it is trading 1.0635/40 with a heavy tone A sustained break below 1.0620 targets eventual move to 2017 low at 1.0340 EUR/USD trending lower with the 5, 10 and 21-day MAs in a bearish alignment A break above the 10-day MA at 1.0769 is needed to ease the pressureGBPUSD Bias: Bearish below 1.30 Bullish above. Oversold short term, but 1.2500 test beckons +0.1% in a 1.2560 - 1.2590 range in a busy session on D3 U.S., UK trade officials to meet for 3rd round of talks in Boston Broad U.S.-UK trade agreement a long term work in progress Charts; momentum studies, 5, 10 & 21 day moving averages head lower 21 day Bollinger bands expand - strong bearish trending setup Targets a test of 1.2496, 61.8% of the 2020-2021 rise Close above 1.2897 10 day moving average to undermine downside bias Asian 1.2560 low and NY 1.2697 high initial support and resistanceUSDJPY Bias: Bullish above 125 Bearish below Japanese importer buys and fresh short-covering sending USD/JPY higher Into Europe, USD/JPY now to 127.94, closing in on 128, low earlier 126.97 Good Japanese importers buys into Tokyo fix, forces specs shorts to bail Position adjustments (JPY buys) ahead of BoJ tom, Golden Week holidays over USD/JPY through ascending 200-HMA at 127.77, descending 55-HMA at 127.82 Some resistance from hourly Ichi cloud between 127.88-128.23 Plenty option expiries below today, tomorrow to help limit downside US yields also up-ticking after fall o/n, today, Tsy 10s 2.715% to 2.778%AUDUSD Bias: Bullish above .7300 Bearish below Regains footing, traders bet on RBA May rate hike AUD/USD rallies 0.9% as Australian inflation hits 20-year high Core inflation rises above RBA's 2-3% target band for first time since 2010 Traders rush to price in a interest rate hike by RBA on May 3rd AUD/JPY rises 1.2% on demand out of Tokyo, provides a further boost for AUD Upside limited; China growth concerns & rising risk aversion to cap rallies Resistance 0.7200-05, 0.7225-30, support 0.7150-55, 0.7120-30

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Soybean Oil Futures (ZL1!), H1 Potential for Bearish Continuation

Type: Bearish ContinuationKey Levels:Resistance: 83'13Pivot: 81'56Support: 79'99Preferred Case:With price expected to reverse off the resistance of the Ichimoku cloud, we see a potential bearish continuation from our pivot level of 81'56 which is in line with 61.8% Fibonacci retracement and horizontal overlap resistance towards our 1st support level of 79'99 which is in line with the horizontal swing low support.Alternative Scenario:Alternatively, price may break our pivot structure and head for 1st resistance level of 83'13 in line with 38.2% Fibonacci retracement and horizontal pullback resistance.Fundamentals:No major news

from Tickmill Expert Blog - Forex Traders Blog https://www.tickmill.com/blog/soybean-oil-futures-zl1-h1-potential-for-bearish-continuation"
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NZDUSD H4 | Potential for Bullish Bounce Type

Type: Bullish BounceKey Levels:Resistance: 0.67285Pivot: 0.66317Support: 0.65361Preferred Case:We see the potential of bullish bounce from pivot level of 0.65331 in line up with 161.8% fibonacci extension and 78.6% fibonacci projection towards the 1st resistance level of 0.67284 in line with 38.2% fibonacci retracement.Alternative Scenario:Alternatively, price might break through the key pivot level and trigger a dip towards the 1st support level of 0.63834 which is in line with previous horizontal swing low support.

from Tickmill Expert Blog - Forex Traders Blog https://www.tickmill.com/blog/nzdusd-h4-or-potential-for-bullish-bounce-type"
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Investment Bank Outlook 26-04-2022

CIBCFX FlowsReady, Steady, Go! Position unwinding kicked off the Asian session. $YEN had a quick move lower, this was accompanied by AUD¥. $YEN fell to 127.35 before bounce back to 127.58 for the Tokyo fix. Japanese Finance Minister confirmed that the media report about Japan-US joint intervention is fake news. Well, nothing new, MoF had already made this claim on Saturday. One commentary noted that the pair needs to close below 127.20 in order for better correction, paving for 125.00. Activity calmed down and eyes turned to offshore $CNH.PBoC pledged to increase support for the real economy, will step up the prudent monetary policy, will add Y100bn relending quota for coal mining and storage. That didn’t help, onshore opened up higher and $CNH jumped from 6.5880 to 6.6100. Madness, crazy, the wild move lasted 3-plus minutes, then slowed down. Onshore $CNY moved below 6.55 and dragged the $CNH along.With sale of AU$¥ earlier, AU$ slipped to 0.7170. But that reversed as we got close to the Tokyo fix. Most of the session the pair stayed in the 0.7180s, moved higher with recovery in Chinese stock market. Iron ore prices still weak, Dalian futures fell more than 2.5%. Fresh offers said to stack up above 0.7220 and more into 0.7240s. Move up onto 0.72-handle follows the move down in $CNH. Market will be keeping a close eye on the Q1 CPI out on Wednesday April 27. Forecasts for another robust set of numbers, putting pressure on RBA to act. Most economists see RBA hiking in June, there was one forecaster calling for hike in May which we doubt so because of elections. Furthermore, there is another risk, weaker growth in China due to continued lockdowns.EUR$ rose amid softer $YEN, felt as though fresh bids have been replenish below 1.0710. They could be linked to the €4.7bn worth of EUR put strikes at 1.0700 due this week. Will be hearing from de Cos and Villeroy later today.Oil futures have been stable and so is the CAD. Weak stops noted above 1.2790 then sellers reappear higher. About $750mio of 1.2785 US$ call strikes will roll off today. No Canadian data out today.CitiEuropean OpenG10 has continued to revolve around China growth outlook with CNH rallying after new PBoC policy commitments proved a welcome boost for domestic stock markets. China-sensitive FX followed suit with AUD, NZD outperforming while rising oil prices buoyed oil-linked currencies. Risk assets felt tailwind with global stocks broadly supported and USD slipped leading USD Asia lower, while PHP was boosted by hawkish central bank comments. Treasuries back under pressure. Focus remains on central bankers as EUR sees de Cos and Villeroy scheduled to appear while HUF is expected benefit from a 100bps rate hike. We look for an improvement in labor markets for PLN and consumer confidence data for USD.

from Tickmill Expert Blog - Forex Traders Blog https://www.tickmill.com/blog/investment-bank-outlook-26-04-2022"
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USDCHF H4 | Potential Bearish Reversal

Type: Bearish ReversalKey Levels:Resistance: 0.96639Pivot: 0.96326Support: 0.94711Preferred Case:Price is near to the key pivot level. We expect that price will potentially reverse from the pivot level of 0.96326 in line with 161.8% fibonacci extension towards the 1st support level of 0.94702 in line with 23.6% fibonacci retracement.Alternative Scenario:Alternatively, price might break the pivot level and rise towards the 1st resistance level of 0.96639 which lines up with -61.8% fibonacci expansion.

from Tickmill Expert Blog - Forex Traders Blog https://www.tickmill.com/blog/usdchf-h4-or-potential-bearish-reversal"
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GBPNZD H4 | Potential For A rise

Type: Bullish BounceKey Levels:Resistance: 1.94491Pivot: 1.91575Support: 1.91067Preferred Case:On the H4, with price expected to bounce off the support of Ichimoku indicator, we have a bullish bias that price will rise to our 1st resistance at 1.94491 where the horizontal swing high resistance is from our pivot at 1.91575 in line with the horizontal swing low support and 50% Fibonacci retracement.Alternative Scenario:Alternatively, price may break pivot structure and head for 1st support at 1.91067 where the horizontal overlap support and 50% Fibonacci retracement

from Tickmill Expert Blog - Forex Traders Blog https://www.tickmill.com/blog/gbpnzd-h4-or-potential-for-a-rise"
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Gold H4 | Potential For A Rise

Type: Bullish BounceKey Levels:Resistance: 1918Pivot: 1892Support: 1875Preferred Case:On the H4, with price expected to bounce off the stochastics indicator, we have a bullish bias that price will rise to our 1st resistance at 1918 where the pullback resistance and 23.6% Fibonacci retracement is from our pivot at 1892 in line with the horizontal swing low support and 127.2% Fibonacci extension.Alternative Scenario:Alternatively, price may break pivot structure and head for 1st support at 1875 where the 161.8% Fibonacci extension.

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Market Update – April 26 – Fragile Sentiment

Sentiment stabilised, after a mostly gloomy session for stocks yesterday. Wall Street got a late boost. Across the Asia Pacific region, the ASX underperformed in catch up trade, after returning from yesterday’s holiday, though global growth fears stoked by China’s strict COVID-19 curbs and an expected streak of aggressive Federal Reserve tightening sapped risk appetite. Wall Street surged and closed with gains, as Twitter jamped sharply on news Elon Musk finalized his purchase for some $44 bln. The late pop on Wall Street pulled rates up. Treasury yields are up from early double-digit lows. Switzerland’s trade surplus narrowed to just CHF 1.8 bln in March, from CHF 5.5 bln in February. The UK government reported a GBP13.1 bln deficit in March this year, less than markets had expected, but still the second-highest number for March.

• Yields closed in the green but well off of double-digit lows early in the day when the market caught a flight to safety bid. The 5-year finished 2 bps lower at 2.845%, with the wi 2-year down 2 bps to 2.650%, and the 10-year off 1.3 bps to 2.806%. Bund yields are backing up and the German 10-year rate has lifted 2.9 bp to 0.86%
• Stocks –  The USA100 has climbed over 1.29%, while expectations for solid gains from Microsoft Tuesday added to the rally. The USA30 and USA500 closed with gains of 0.70% and 0.57% as well after trading in the red much of the day as growth concerns weighed heavily, with a steep slide in energy. Nikkei lifted 0.4%. 
• USDIndex remains on bid, at 101.85 highs.
• Oil prices dropped by 4% at $95.05 but added 0.89% to $99.42 a barrel currently. Worries over China’s fuel demand were soothed by the central bank’s pledge to support an economy hit by renewed COVID-19 curbs.
• Gold dips to $1890 more than 2- month support.
• FX markets – USDJPY dropped back to 1.2787, although AUD and NZD and to a lesser extend the CAD outperformed, after being pressured yesterday.  EUR and Sterling remain at low levels against the USD, with Cable at 1.2740 and EURUSD at 1.0710.

Today – This week’s calendar is loaded with key data, events, and earnings that will give hawks and doves plenty of ammunition and keep the markets in flux. Today focus turned to US Durable goods and Consumer Confidence.

Biggest FX Mover @(07:30 GMT) USDZAR (+0.94%) Breached 15.82. MAs still aligned higher, MACD signal line & histogram moving higher but very close to neutral zone, RSI 67 and rising, H1 ATR 0.05376, Daily ATR 0.2097.

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Andria Pichidi

Market Analyst

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