Kuroda told G7 that BOJ will patiently continue with powerful easing
Fed Bullard: We have to get inflation under control. We have a good plan to do so
Eurozone May consumer confidence flash reading -21.1 vs -21.5 expected
ECB’s Visco: We must get out of negative rates without adding uncertainty to the market
Baker Hughes US oil rig count 576 vs 563 prior
ECB’s Villeroy: The inflation fight means normalizing interest rates
ECB’s Nagel: Negative interest rates are a thing of the past

Markets:

Gold up $3 to $1844
US 10-year yields down 7 bps to 2.79%
WTI crude oil up 95-cents to $110.83
S&P 500 up 0.1%
Nasdaq -0.3%
NZD leads, EUR lags

The weekly decline in the S&P 500 was the seventh in a row, which is the longest streak since 2001. The worst-ever streaks were 8 weeks in 2001 and 1970. I’ve attached from forward returns after 6, 7 and 8 weeks below from Compound Advisors.
There’s plenty of focus on stocks at the moment. The S&P 500 opened higher then was down more than 2% at the lows but recovered very late in the day to finish fractionally higher.
What’s interesting is that the correlation with FX has broken down.The dollar was generally softer today and yen crosses were largely higher. That’s a shift from the recent trend.
Bonds are also offering a different tone with yields down for the second week in a row. That might reflect risk aversion but it at least makes the argument that deleveraging has run its course, at least for now.
In terms of intraday moves, it was a chop in FX. The price action was ultimately sideways on most fronts in New York trade, though cable closed near the highs and the euro closer to the lows.
There was a steady bid in the kiwi. It along with the Australian dollar both tested the Asian lows and held, then moved up.
CAD lagged its cousins but not dramatically. Oil was higher once again as the incredible resilience continued. That wasn’t much of a help for the loonie though as concerns about housing mount. Note that Canada is off on Monday for a holiday.
Have a great weekend.

The major US stock indices snatched victory from the jaws of defeat – at least for the Dow industrial average and S&P index. The NASDAQ index still closed negative on the day as did the Russell 2000. However, both indices had moral victories after erasing most of the intraday declines (the Nasdaq was down -3.10% at session lows).  At session lows:The Dow industrial average was down -617.37 points or -1.98% S&P index was down -90.29 points or -2.31%NASDAQ index was down -352.81 points or -3.10%At the end of the day:Dow industrial average rose 7.45 points or 0.02% at 31260.57S&P index rose 0.60 points or 0.02% at 3901.38NASDAQ index fell -33.87 points or -0.30% at 11354.63Russell 2000 fell -2.95 points or -0.17% at 1773.26Fed’s Bullard speaking on FOXBusiness was anticipated by markets. Stocks were trading near low levels as he started to speak, with expectations he would be ultra hawkish. Instead he maintained that he prefers 50 basis point hikes (and not 75 or 100 bps). He sees above trend growth going forward. He sees employment moving lower to perhaps less 3%, and does not see a recession in 2022 or 2023. He DOES expect rates to rise to 3.5% by the end of the year which implies 50 basis point hikes at each Fed meeting until then. However, that is the cost of doing business to have his upbeat economic viewpoint. Stocks started to bounce soon after he was done speaking.The bad news for the indices is:The Dow still closed lower for the 8th consecutive week which has not been done since 1923The S&P and NASDAQ index also closed lower for the 7th consecutive week. For the week:Dow industrial average fell -2.9%S&P fell -3.02%NASDAQ index fell -3.28%The last month of trading has seen:Dow industrial average -10.15%S&P index -11.18%NASDAQ index -13.81%Today the S&P index broke into bear market territory with the index falling -20.9% from its all-time high. However, the end of day rally has led to a close around -19% from that all-time high. Closing in bear market territory was averted.The NASDAQ index reached a new year – and cycle – low and traded down -31.93% from its all-time high reached in November before rebounding.The Dow industrial average also reached a new cycle low as it fell to -17.09% from its January all-time high before rebounding into the close.Next week earnings will be highlighted by:Zoom on Monday.  Toll Brothers and Best Buy on Tuesday. Snowflake, Box, and Nvidia on Wednesday.  Dell, Macy’s, Costco on Thursday.  All have the potential to tell a story about the market, the economy and inflation. Zoom is considered a pandemic stock, but does it have a more lasting place post pandemic?Toll Brothers expectations for future growth will be of interest as the Fed tries to slow down the rampant housing marketBest Buy is another retail barometer.  Will it show signs of slowing and price issues?Snowflake is one  of those growth companies whose earnings have to grow into their elevated stock price. Even so, it’s stock is down -63.46% from its November highNvidia is the darling of the chip stocks, but is down -48% from its all-time highDell is barometer for of computer demandMacy’s a brick-and-mortar retailer is trying to do more business online. What do they see from the consumer?Costco as close as April 8, traded at its all-time high price. The last 6 weeks have seen the price move down -32%. The stock is closing  below its 100 week moving average this week at $416.43. The high price in early April was $612.27.This week both Walmart and Target disappointed and spoke to margins being hammered by higher costs.  Their earnings changed the tone of the stock market and views on the economy, inflation and even the Fed (will they bite the bullet and go 100 bps).  Fed’s Bullard eased some of those fears at least for now.  

There’s a consistent theme of US dollar weakness across the board this week. That goes along with falling yields and rising gold.
It’s a picture that looks more like a broader turn than anything we’re seeing in the stock market, though some of the strength into Friday’s close is promising.
I’m not a fan of the dollar index but it paints a good picture at the moment and shows the potential for a retracement, even within the ongoing trend.

A dip to 101 would be a standard-sort of 38.2% retracement from the February lows.On the flipside, the the old high combined with the 2017 high formed something of a double top and we might just be seeing a retest of that before another leg higher.What I think we’re seeing play out in the bigger picture is that a global central banks are being forced to join the Fed in tightening. It may not be at the same pace but there wasn’t much hiking priced in for Europe but now there is. So far the BOJ is holding the line but the SNB showed cracks this week.Secondly, the US dollar benefited from a special bid due to technology stocks. That bubble is bursting at the moment and it will draw money out of the US during the next wave of investing, which will be in value stocks.