20 April: Carney sends Cable into a tailspin. US$/Yields firm, stocks lower. Japan CPI today. Otherwise quiet calendar.

By | April 20, 2018

 

It has been a hectic day in the markets, with something for everyone. US stocks fell for the first time in four days, by around 0.5%, as technology shares came under pressure from trade and earnings concerns, while also under pressure from higher rates as Treasuries hit the lowest since February amid inflation worries. US 10 year yields rose to 2.91%. Currencies were volatile, led by Cable, which dipped initially after retail sales missed expectation, but quickly recovered. Then BOE Governor Mark Carney was interviewed on TV and prevaricated about the timing of the next rate hike. This had previously been pretty much fully priced in and his comments sent shudders through Sterling which quickly fell another 130 points, to close on its lows against the dollar and most other major pairs. In other currencies, the Euro and the Chf were dragged a little lower by the move in Sterling, and EurChf finally touched the previous floor at 1.2000. The other interest was in the commodity bloc, where the Aud and Kiwi reversed earlier gains and were heavily sold in NY to finish at 2 week lows. The metals were choppy and slightly lower due to US$ strength, but oil almost made it to $70pb (high 69.52) before reversing quite sharply on profit taking, although sentiment remains relatively upbeat amid expectations that major oil producers will confirm continued compliance with OEPC-led production curbs in a meeting slated for Friday

Friday will be pretty thin in terms of data with the Japan March CPI (exp 1.1%yy) and the EU Consumer Confidence for April being the only two points of note. Central Bank speakers will include the BOE’s Saunders, Buba’s Weidmann and the Fed’s Evans/Williams. Also note that Trump could announce at any moment the list of new products that will incur tariffs. Have a good weekend.

CURRENCIES
EURUSD: 1.2343
Res  1.2365  1.2385  1.2415
Sup  1.2325  1.2300  1.2275
USDJPY: 107.43
Res  107.50  107.75  107.90
Sup  107.25  107.10  106.90
GBPUSD: 1.4081
Res  1.4120  1.4140  1.4185
Sup  1.4065  1.4040  1.4015
USDCHF: 0.9714
Res  0.9725  0.9740  0.9760
Sup  0.9695  0.9665  0.9650
AUDUSD: 0.7727
Res  0.7740  0.7760  0.7785
Sup  0.7720  0.7700  0.7680
NZDUSD: 0.7269
Res  0.7290  0.7320  0.7345
Sup  0.7260  0.7245  0.7210
INDICES / COMMODITIES
S&P: 2692
Res  2705  2720  2735
Sup  2680  2660  2645
DJI: 24629
Res  24820  24990  25185
Sup  24515  24415  24205
ASX SPI: 5849
Res  5870  5885  5900
Sup  5835  5820  5800
XAUUSD: 1345
Res  1350  1355  1360
Sup  1340  1335  1330
XAGUSD: 17.23
Res  17.35  17.50  17.75
Sup  17.10  16.85  16.60
WTI: 68.27
Res  68.90  69.55  70.00
Sup  68.00  67.55  66.75