The Fed blackout starts at midnight but there’s always a race to get in the last word:

• Welcomes moderation in housing-related inflation
• High inflation as become embedded in the economy
• Job market still strong but there are signs of cooling
• Inflation pressures have been abating but core prices still sticky
• March PCE inflation likely to moderate to 4%
• Path back to 2% likely to be uneven and bumpy
• We’re trying to figure out where the Fed needs to stop with rate rises
• Continued economic strength and slower disinflation could push the Fed to do more
• Monetary policy moving into a more uncertain phase

These are relatively dovish comments and work well with a one-and-done scenario where the Fed wants some time to wait and see how the economy evolves.

The March PCE inflation report is due out on Friday.

This article was written by Adam Button at www.forexlive.com.

• S&P Global US April flash services PMI 53.7 vs 51.5 expected
• Canada February retail sales -0.2% vs -0.6% expected
• BOE’s Ramsden: High inflation is a bigger risk tthan over-tightening
• US five-year credit default swaps rise to 51 basis points
• The Federal Reserve heads into the blackout period tomorrow
• Earnings calendar for next week highlighted by Microsoft, Meta, Amazon, Alphabet, Intel.

Markets:

• S&P 500 flat at 4155
• WTI crude oil up $0.43 to $77.80
• US 10-year yields up 2.3 bps to 3.568%
• Gold down $22 to $1982
• EUR leads, CAD lags

The daily changes in the largest currencies on Friday were minimal but the day wasn’t without drama. In particular, the US PMI from S&P Global led to a sharp rally in the US dollar, including 100 pips in USD/JPY and half that in EUR/USD and GBP/USD. The report was surprisingly strong including high numbers on new orders and price pressures that few people saw coming.

Some skepticism set in after the numbers though and the dollar move faded. Ultimately, the dollar rally completely reversed (and more) against the euro and pound. USD/JPY held onto about 60 pips of gains from the low but that was still not enough to erase the losses from European trading.

There mood in the markets is uncertainty right now. For every data point that indicates a recession, there is one that shows the economy on solid ground. This week a soft Philly Fed cranked up the recession talk again only for it to be undercut by the number today. Next week there is another round of data but the market is less likely to be swayed by second-tier data points unless a few run in the same direction.

One worrisome sign was the underperformance of commodity currencies. It came despite gains in oil, though copper was down slightly and gold fell 1%. Some pointed to softer global manufacturing PMIs today as a worrisome sign for global resource demand and that could have been a factor.

The loonie was especially soft but that owes to weak details in the Canadian retail sales report. I’ll repost here what I told Reuters.

„High mortgage rates are starting to bite Canadians‘ wallets,“ said Adam Button, chief currency analyst at ForexLive. „Canada is particularly sensitive to higher interest rates and that will lead to divergence in U.S. and Canadian economic performance in the second quarter and beyond.“

This article was written by Adam Button at www.forexlive.com.

The markets traded in relatively narrow trading range today and for the week.

Looking at the low to high trading ranges for the major indices:

• The NASDAQ index range for the week was only 258 points. That was the lowest range since December 2021.
• The S&P index range for the week was 55.62 points. That is the lowest range going back to November 2021.
• The Dow Jones industrial average range of 340.88 points was its lowest range going back to August 2021.

That’s not a lot of movement. The market is non-trending, but a slew of earnings (Microsoft, Alphabet, Amazon, Boeing, McDonald’s, Intel, GM, 3M, Southwest air, etc.) next week will likely lead to something bigger and better next week. So be aware. Be prepared.

In trading today today, the major indices are closing with modest gains. The final numbers are showing:

• Dow industrial average was 22.45 points or 0.07% at 33809.10
• S&P index up 3.73 points or 0.09% at 4133.53
• NASDAQ index of 12.89 points or 0.11% at 12072.45
• Russell 2000 rose 1.808 points or 0.10% at 1791.50

For the trading week, all the major indices closed lower:

• Dow industrial average fell -0.23%. The decline was the 1st decline after 4 weeks of gains.
• S&P index fell -0.10%
• NASDAQ index fell -0.42%
• Russell 2000 bucked the trend with a gain of 0.58%

This article was written by Greg Michalowski at www.forexlive.com.

• Need to make sure that monetary inflation doesn’t develop
• I’m focused on staying the course on tightening
• Domestically driven inflation pressure remains

The market has priced in 70 bps more of tightening through September, including an 89% chance of 25 bps on May 11.

This article was written by Adam Button at www.forexlive.com.

Next week is arguably the biggest one for the earnings for the quarter. There are a number of big cap companies on the calendar, with the potential to surprise and send stock prices higher or lower Moreover with the economy sitting on the fence (soft landing? hard landing? no landing?), forecast for forward earnings will also be dissected by market traders.

Below is a list of the major announcements by day:

Monday, April 24

• Whirlpool
• Coca-Cola
• First Republic Bank

Tuesday, April 25

• Microsoft
• Alphabet
• 3M
• GM
• UPS
• McDonald’s

Wednesday, April 26

• Meta
• Boeing
• Hilton
• Mattel
• eBay
• Norfork Southern

Thursday, April 27

• Amazon
• Intel
• Caterpillar
• Merck
• Southwest Airlines

Friday, April 28

• Chevron
• Exxon Mobil
• Colgate-Palmolive
• Sony

This article was written by Greg Michalowski at www.forexlive.com.