Daily Market Outlook, April 28, 2023
Wall Street surged overnight as tech earnings continue to support risk sentiment, Asian equities duly followed suit as markets remain bid buoyed by the latest robust round of earnings and further positive momentum came from the inaugural Bank of Japan meeting with new chief Governor Ueda. The newly minted BoJ head decided to leave the banks ultra-easy policy settings unchanged, including short-term interest rates at -0.1% and the target for 10-year government bond yields at 0%.The BoJ removed its guidance on interest rates although they confirmed that rates would stay at current or lower levels, as expected the bank also announced a review of its ultra easy monetary policy and its economic impacts, however, the review isn’t expected to complete until 2025, Ueda did state that monetary policy could change before teh review is complete.
There is no tier one data of note form the UK today ahead of the bank holiday extended weekend. European investors will focus on the first look at Q1 GDP, GDP data is expected to reaffirm the economy sidestepped a recession in Q1 this year with an uptick in industrial production and incremental improvement in trade balance as the energy supply shock has been neutralised.
US investors will parse the Q1 employment cost index, coupled with the Fed’s favoured inflation metric the PCE deflator data due later today, markets are looking for 1.1% print for the ECI which would represent a decline on an annual comparison basis. PCE inflation is also pencilled to retreat in unison with CPI data as the energy input continues to be supportive of lower inflation figures, markets are expecting a decent pull back from the prior 5% print to something closer to 4%, however, the core number, excluding food and energy is expected to remain stubbornly elevated at the prior 4.6%. Rounding out the week will be a first look at Chicago PMI data, investors will be looking for any signs of improvement in sentiment given the uneven nature of manufacturing data across the US regions.
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: 1.1000 (3.1BLN), 1.1025-30 (594M), 1.1040-50 (1.3BLN)
USD/CHF: 0.8820 (400M), 0.8950 (294M)
GBP/USD: 1.2395-1.2400 (407M), 1.2500 (252M), 1.2600 (454M)
EUR/GBP: 0.8850 (229M), 0.8875 (209M), 0.8900 (267M)
AUD/USD: 0.6550 (924M), 0.6600 (1.25BLN), 0.6630-35 (677M), 0.6650 (405M)
USD/CAD: 1.3600 (809M), 1.3625 (387M)
USD/JPY: 134.00 (536M), 135.00 (422M)
CFTC Data As Of 21/04/23
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
BoJ’s Ueda Scraps Guidance On Rates, Calls Review, Holds Policy
CPI In Japan's Capital Accelerates, Keeps BoJ Under Pressure
Australian Producer Price Index Suggests More From The RBA
Fed Emergency Lending To Banks Ticks Up Modestly In Latest Week
Yen Slumps After BoJ Decision, Dollar Headed For Monthly Loss
Oil Set For Second Weekly Drop As Recession Fears, Rates Cloud Outlook
Amazon Q1 Beats, But Raises Fears Of Continued Slowing Cloud Growth
Intel Forecasts Second-Quarter Revenue Above Estimates
T-Mobile Misses Est For Quarterly Rev, Wireless Sub Additions
Amgen 1st Quarter Profit Falls As Costs Rise, Sales Up 2%
(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 bearish, 5 Day VWAP bullish
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EURUSD Bias: Intraday Bullish Above Bearish below 1.0990
Primary support is 1.07
Primary objective is 1.1128
Below 1.0700 opens 1.0660
20 Day VWAP bullish, 5 Day VWAP bearish
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GBPUSD Bias: Intraday Bullish Above Bearish below 1.2410
Primary support is 1.2250
Primary objective 1.2659
Below 1.22 opens 1.2010
20 Day VWAP bullish, 5 Day VWAP bullish
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USDJPY Bias: Intraday Bullish above Bearish Below 135.00
Primary resistance is 137.30
Primary objective is 129.15
Above 137.30 opens 138
20 Day VWAP bearish, 5 Day VWAP bullish
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AUDUSD Bias: Intraday Bullish Above Bearish below .6685
Primary resistance is .6750
Primary objective is .6565
Above .6775 opens .6825
20 Day VWAP bearish, 5 Day VWAP bearish
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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 bullish
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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!