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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 jumped 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 on 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 dipped to $1890 more than 2-month support.


• FX markets – USDJPY dropped back to 1.2787, although AUD and NZD and to a lesser extent 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 turns 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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