Week to April 26th

LAST WEEK (all times GMT)

  • Another strong earnings week
  • SPX hits new closing all-time high
  • USD and Oil at 2019 highs
  • Four-day week in Europe

 

Monday April 22
The big news over the weekend was the end of US sanctions waivers for Iranian Oil which pushed the black stuff up 2.6% (Brent up 3%) along with FTSE and DAX futures. US equity markets, which were open, ended flat. With London closed there was very little action in forex, and no direction. DXY was flat overall. Yields moved up slightly.

 

Tuesday April 23
Strong earnings from TWTR and KO gave makers a strong boost today, and took SPX  up 0.9% to a new all-time high, the first since Sep 20. Non-US indices followed, although the effect was more muted in DAX. The dollar also had a good day after the positive housing data, and DXY added 0.32%, Gold was down in line with the dollar move, although unusually, JPY and bonds (inverse to yields) were slightly up.

 

Wednesday April 24
The SPX ATH having been reached, today’s earnings releases had less effect than expected. BA only matched EPS, missed on Revenue, paused their buybacks, and delayed guidance due to the 737 MAX problems, yet the shares hardly moved. It was a similar story with V, who beat estimates, yet ended the day flat. SPX ended the day 0.2% down.

 

The picture was quite different elsewhere in the word. NKY fell sharply in the cash session, and recovered only slightly. FTSE also fell throughout the day, however DAX was stronger, up 0.6% on sharp rises in SAP.DE and WDI.DE.

 

The dollar had another strong day, with DXY up 0.48% across the board to a new two-year high. CAD fell after the dovish BoC statement at 1500. EUR was already down after the German IFO sentiment misses at 0800, and AUD fell on the CPI miss at 0030. Once again, the risk indicators were mixed. Despite a sudden move down in JPY around 1600, Gold steadily climbed, and yields fell again, by 5bp today.

 

Thursday April 25
Strong post-bell earnings on Wednesday for FB and MSFT pushed the latter to an all-time high, however the flat SPX top continued. MMM fell 13% on poor earnings, meaning DJIA was down 0.4%. World indices were similarly off slightly.

 

DXY took a breather today, and was up only 0.09% (yet another two-year high), and that was only because of an unusually strong move up (about 80 pips) in JPY after the BoJ statement at 0600. Other currencies were fairly flat, although Gold was up again. Yields advanced 1bp. After two flat days, Oil gave up a dollar.

 

Friday April 26
Strong AMZN earnings but a miss from INTC meant NDX gapped down and then rallied to close flat. SPX was better, up 0.5% to make another new high after the GDP (1230) and MCSI (1400) beats (NDX made new highs last week). NKY and DAX followed, but FTSE stumbled as GBP turned up after falling all week.

 

The dollar gave up 0.1% today, across the board, with all currencies advancing (except JPY which was flat). Gold and bonds were up in line. This was due to the PCE miss at the same time as GDP. PCE is the Fed’s preferred inflation indicator. GDP does not really move the dollar, as growth is not part of the Fed mandate. Oil gave up all its recent gains, sliding 3.46% on worries about over-supply.

 

WEEKLY PRICE MOVEMENT

NDX was the winner this week, outperforming DJIA by some margin, and AUDJPY was the weakest pair, falling 1.92%. FB beat the other FANGs after earnings. In crypto, BTC hardly moved but ETH had a bad week giving up 11.75%.

 

Note we use Google Finance data for daily movements, listing UUP as a proxy for DXY. All references to ‘the dollar’ are based on UUP. The equity and index prices are now based on the cash close each day.

 

NEXT WEEK (all times are GMT)
(Calendar High volatility items are in bold)

 

  • NFP and Fed Rate in same week
  • GDP and inflation in Europe
  • Chinese Manufacturing PMI
  • AAPL and GOOGL report

 

Monday April 29
MCD and GOOGL report today. Markets in Japan are closed until May 7 as the Heisei era gives way to Reiwa as the new Emperor accedes to the throne. They are also closed in Greece and some Eastern European countries for Orthodox Easter Monday, and also in Egypt and Vietnam.

09:00 EUR Eurozone Business Climate
12:00 MCD Earnings
12:30 USD US PCE/Personal Spending
21:00 GOOGL Earnings
23:01 GBP UK GfK Consumer Confidence

 

Tuesday April 30
EUR could be affected early today with the first reading of Eurozone GDP followed by the German inflation print. GE report before the bell, along with minor DJIA components PFE and MRK, but there will be more interest in AAPL who report 30 minutes after the close. There may be some month-end volatility. There is a rate decision on HUF (0.9% hold expected). Markets remain closed in Ukraine

01:00 CNY China NBS PMIs
06:00 EUR Germany Gfk Consumer Confidence Survey
07:55 EUR Germany Unemployment Rate/Change
09:00 EUR Eurozone 19Q1 GDP prelim (YoY est 1.1% unch.)
09:00 EUR Eurozone Unemployment Rate
10:30 GE Earnings
12:00 EUR Germany CPI prelim. (e 1.6% p 1.4%)
12:30 CAD Canada GDP (MoM
13:00 USD US S&P/Case-Shiller Home Price Indices
13:45 USD Chicago PMI
14:00 USD US Consumer Confidence/Pending Home Sales
14:00 CAD BoC Governor Poloz speaks
20:30 WTI API Oil Stock
20:30 AAPL Earnings
22:30 AUD Aus AiG Performance of Mfg Index
22:45 NZD NZ Emp Change/UnEmp (e 1.0% p 0.1%)

 

Wednesday May 01
A new month, and we are straight into the Fed rate decision meeting, with the CME Fedwatch tool showing a 97.5% chance of a hold, and 2.5% for a cut. Note the prediction for a cut in June is as high as 20%. A distinct change from last year. No majors on earnings today, but several NDX components (PEP, QCOM and KHC) report. Markets are closed in China, South Africa, and most of Europe and Latin America for International Labour Day. The US/Canada, UK, and Australia/New Zealand are open.

08:30 GBP UK Markit Manufacturing PMI
12:15 USD US ADP Employment Change
13:30 CAD Canada Markit Manufacturing PMI
13:45 USD US Markit Manufacturing PMI
14:00 USD US ISM Manufacturing PMI (e 55.0 p 55.3)
14:30 WTI EIA Oil Stock
18:00 USD Fed Rate Decision/Statement (e 2.5% hold)
20:15 CAD BoC Governor Poloz speaks
22:45 NZD NZ Building Permits

 

Thursday May 02
Attention turns to the UK today with the BoE but no surprises are anticipated. The Chinese Manufacturing PMI is important, as it only recently turned back positive (over 50), and traders will be disappointed if the momentum does not continue. As well as GBP, there is rate decision on CZK (1.75% hold expected)

01:30 AUD Aus HIA New Home Sales (time approx.)
01:45 CNY China Caixin Manufacturing PMI (e 50.9 p 50.8)
06:00 EUR Germany Retail Sales
07:55 EUR Germany Markit Manufacturing PMI
08:30 GBP UK Markit Construction PMI
11:00 GBP BoE Rate Decision/Statement (e 0.75% hold) 
11:30 GBP BoE Governor Carney speaks
12:30 USD US Jobless Claims/Productivity/Labor Costs
14:00 USD US Factory Orders (MoM)

 

Friday May 03
Another month, another NFP, with the usual estimate level, and of course the most important event of the day. The only significant earnings are BABA before the bell. BABA of course is not part of NDX. Markets are closed in Poland for Constitution Day.

01:30 AUD Aus Building Permits (MoM)
07:30 CHF Swiss CPI
08:30 GBP UK Markit Services PMI
09:00 EUR Eurozone CPI prelim. (e 1.6% p 1.4%)
12:30 USD US NFP/Unemp/AHE (e 180k p 190k)

13:45 USD US Markit Services/Composite PMI
14:00 USD US ISM Non-Manufacturing PMI (e 57.2 p 56.1)
17:00 WTI Baker Hughes Rig Count

 

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