• Major US stock indices close lower but recover about half of the day declines
• Gold tumbles and falls back below $2000, but rebounding
• WTI crude oil settles at $82.52
• What happens to when the Fed finally cuts rates?
• SNB’s Jordan: We can’t exclude that we may have to tighten again
• Baker Hughes oil rig count -2 at 588
• Atlanta Fed GDPNow estimate for 1Q growth rises to 2.5% from 2.2% last
• European indices close week with gains
• ECB’s Simkus: Core inflation is expecetd to peak next month or shortly afterwards
• Larry Fink says inflation unlikely to fall below 4% soon but I’m not so sure
• UMich US April consumer sentiment 63.5 vs 62.0 expected
• US March industrial production +0.4% vs +0.2% exp
• Waller Q&A: I don’t think we need to hike quite as high as in February
• ECB sources: Policymakers call for a full halt to QE reinvestment in H2
• Waller: Recent data show Fed hasn’t made much progress on inflation, more hikes needed
• Fed’s Goolsbee: Retail sales number might show some of the lag of mon pol
• US import prices for March -0.6% versus -0.1% expected
• US March retail sales -1.0% vs -0.4% expected
• The EUR is the strongest and the GBP is the weakest as the NA session begins
• ForexLive European FX news wrap: Dollar hangs on in there
• ECB’s Lagarde says expect euro area inflation to continue to fall
• Fed’s Bostic: Recent developments are consistent with us hiking one more time

Retail sales in the US were weaker than expectations but it was Fed’s Wallers comments which surprised the markets more. Waller said that recent data show Fed hasn’t made much progress on inflation, and followed that up with more hikes are needed. That was hikes…not another hike. So although the market has been tolerating the playbook that the Fed was to have one more hike, they were not thinking there would be multiple hikes left from the Fed.

Say it ain’t so.

Now Waller is typically more hawkish and perhaps he was sent out to take one for Chair Powell, and slow the S&P from heading to 4200. I am not sure the Fed wants to see stocks racing too far ahead as they try to ease the economic ship in for a soft landing. After all if the economy falls off the cliff as some see ahead, the implications for stocks could get uglier from loftier levels. Moreover, the debt market is also at odds with Feds thinking with 2 year yield trading above and below 4% today when the Fed is targeting 5.25% or more (according to Waller) and intent on not looking to ease until 2024 at the earliest. The disconnect is evident in the January Fed funds contract as well which is pricing in a fed funds rate of 4.47% (it was at 4.36% earlier in the day). Again the Fed is looking for a minimum of a high range for the Fed target at 5.0% -5.25%.

Waller at least slowed the stock and bond ships down a bit.

Later the Univ. of Michigan consumer sentiment (preliminary) came out and although sentiment remained high at 63.5 vs 62.0 last month, it was the inflation reading that caught most of the markets attention. That measure saw the 1 year inflation expectations rising sharply to 4.6% from 3.6%.

So in addition to Waller, the consumer is not buying the „happy days are just ahead“ for inflation. Having said that, this week the CPI and the PPI data were encouraging and the math of the next few months at least, imply that with a little luck – and some cooperation from shelter costs – a big chunk from the CPI headline at 5%, can be further eroded from headline and core inflation readings (see post here). The not so great part of that idea, is gas and oil prices are on the rise again and that can raise costs across many sectors of the economy (not just at the gas pump).

The implications of the news today in the currency market, was the USD was king and is ending the day as the strongest of the major currencies (see ranking below). The NZD was the weakest followed by the AUD as risk-off sent those currencies lower vs most currencies (the USD was up 1% vs both those currencies).

Although the USD was higher across all the major currencies today, it is ending the trading week mixed vs the major currencies. The USD was weaker vs the following currencies

• EUR, -0.86%
• CHF, -1.26%
• CAD, -1.17%
• AUD, -0.71%

The USD was stronger or unchanged vs the following:

• JPY, +1.21%
• GBP, unchanged
• NZD, +0.68%

The US stocks today are ending the day down despite a good start to the earnings season from some banks. JPMorgan shares rose 7.55%, CItibank rose 4.78% PNC rose 0.36%, but Wells Fargo fell -0.05% after largely better than expected earnings.

For the major indices, although they closed off lows, they still ended the day lower:.

• Dow fell -0.42%
• S&P fell -0.21%
• Nasdaq fell -0.35%

For the trading week, all three indices did close with gains:

• Dow Industrial Average average rose 1.20%
• S&P index rose 0.79%
• NASDAQ index rose was the laggard with a modest gain of 0.29%

In the US at that market, yields reacted to the upside on the data/news with the two year yield back above the 4% level at 4.103%. A snapshot of levels at the end of the week shows:

• 2 year yield 4.103%, up 13.1 basis points
• 5 year yield 3.61% up 10.5 basis points
• 10 year yield 3.517% up 6.8 basis points
• 30 year yield 3.738% +4.9 basis points

For the trading week:

• 2 year yield rose 11 basis points
• 5 year yield rose 9.3 basis points
• 10 year yield rose 10.4 basis points
• 30 year yield rose 11.5 basis points

The price of gold/silver fell sharply today reacting to higher yields and stronger dollar:

• Spot gold fell $36.84 or -1.81% to $2003.43. For the trading week, gold prices fell $-3.62 or -0.18%
• Spot silver fell $-0.50 or -1.94% to $25.31. For the trading week the price still rose by $0.36 or 1.43%
• Crude oil rose $0.36 to $82.52 today. The high for the week reached $83.53. That is precisely where the 200 day moving average is currently located. Next week the 200 day moving average will be a key barometer for both buyers and sellers – move above is more bullish. Stay below is more bearish. The low for the week reached the $79.37 this week. Overall, crude oil is ending the week up $1.82 or 2.26%.

Next week, CPI data from Canada, Japan, New Zealand, UK will all be released. The Reserve Bank of Australia meeting minutes (they kept rates unchanged) will be released. The ECB will also release meeting minutes (raised by by 50 bps to 3.5%).

In the US, the Philly Fed and the Empire manufacturing indices will be released along with existing home sales and flash manufacturing/services PMI data.

On the earnings calendar, big names are still a week or two away from release. More financial institutions will dominate the calendar in the upcoming week:

Monday April 17

• State Street Bank

Tuesday, April 18

• Goldman Sachs
• BNY Mellon
• Bank of America

Wednesday, April 19

• Morgan Stanley
• bancorp
• Zions Bancorporation
• Citizens

Thursday, April 20

• Huntington
• Comerica
• KeyBank
• Truist

Starting the week of April 24, the earning shifts into high gear (subject to change) Below is a preview of what’s to come. Traders will be watching the projections going forward. If earnings estimates start coming down, the S&P and major indices could be in trouble:

Monday, April 24

• Coca-Cola
• Kimberly-Clark

Tuesday, April 25

• Alphabet
• PepsiCo
• Verizon
• UPS
• Raytheon
• Lockheed Martin
• GE
• 3M
• GM
• Chipotle
• Dow
• Snap
• Whirlpool

Wednesday, April 26

• Meta Platforms
• Visa
• AT&T
• Qualcomm
• Boeing
• ServiceNow
• General Dynamics
• Hilton Worldwide

Thursday, April 27

• Apple
• Microsoft
• Amazon
• Merck
• Bristol-Myers Squibb
• Intel
• Caterpillar

Thanks for your support. Have a great and safe weekend to all.

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

The major US stock indices are closing the day lower but recovered nicely off of session lows.

The final numbers are showing

• Dow industrial average -143.22 points or -0.42% at 33886.48. The Dow industrial average was down -298.85 points at session lows..
• S&P index -8.58 points or -0.21% at 4137.63. The S&P was down -33.01 points at session lows.
• NASDAQ index -42.82 points or -0.35% at 12123.46. The NASDAQ index was down -139.72 points at session lows.
• Russell 2000 fell -15.52 points or -0.86% at 1781.15

For the trading week, the major indices are closing higher:

• Dow industrial average rose 1.2%, and is now up 4 consecutive weeks
• S&P index rose 0.79% and is up four of the last five trading weeks
• NASDAQ index rose 0.29%. It too is up four of the last five trading weeks
• Russell 2000 rose 1.52% for the week.

;

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

The price of gold has tumbled today with the sharp rise in the USD today. The price moved down -$47.68 at session lows today. The price is currently down -$32.74 which is still down -1.60%. The current price is at $2007.40. The low reached $1992.59.

Looking at the hourly chart, the fall today extended below the 100 hour MA and then the 200 hour MA next at $2015.58 and $2010.74 respectively.

The low today stalled just ahead of the 50% midpoint of the move up from the March 22 low. That comes in at $1991.35.

What next?

The 200 hour MA will now be eyed as resistance (at $2010.74). Stay below is more bearish. Move above it and then the 100 hour MA at $2015.57 and given the recent volatility it will could „fast break the other way“ once again.

The USD is seeing some downward drift over the last 3 or so hours. That is certainly helping the corrective tones today.

For the trading week. The price is trading near unchanged on the week (down about -$0.50 or -0.02%). The high took the price up $41.74. The low took the price down -$25.27

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

The price of crude futures settled up $0.36 at $82.52. The high price reached $83.12. The low price reached $81.76.

The price this week moved up $1.82 or 2.24%

The high price this week reached $83.53 reached on Wednesday. That happens to be the falling 200 day moving average currently. Staying below that moving average kept the sellers in play. Next week that level will be a key barometer for both buyers and sellers. If broken – and stay broken – it could be a prelude to a run toward the 38.2% retracement near the $90 level.

Conversely stay below and a rotation back toward the post OPEC+ gap low which came in at $79.

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

The EURUSD selling continued into the morning session and in the process moved into a swing area defined by the 100 hour MA at 1.09664, and the 38.2% up at 1.09818. In between was the high from last week at 1.09728.. The low stalled at 1.09717 right near the middle of the support cluster.

The price has moved up to 1.0990 on the rebound.

Holding that area probably gives the buyers the control. The correction lower although fast DID hold the target area and the price remains above the 100 hour MA and the 38.2%. Those are two technical levels that would need to be broken at a minimum, if the sellers are to take more control.

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

Headlines:

• Dollar trims losses as the tension continues to build
• Wells Fargo reports beat on earnings, profit rise on higher rates
• JP Morgan joins in on the earnings beat
• Fed’s Bostic: Recent developments are consistent with us hiking one more time
• ECB’s Wunsch: May policy decision is between 25 bps and 50 bps rate hikes
• ECB’s Lagarde says expect euro area inflation to continue to fall
• France March final CPI +5.7% vs +5.6% y/y prelim
• Spain March final CPI +3.3% vs +3.3% y/y prelim
• Germany March wholesale price index +0.2% vs +0.1% m/m prior
• Switzerland March producer and import prices +0.2% vs -0.2% m/m prior

Markets:

• EUR leads, GBP lags on the day
• European equities higher; S&P 500 futures down 0.1%
• US 10-year yields up 0.7 bps to 3.458%
• Gold down 0.3% to $2,033.95
• WTI crude up 0.3% to $82.25
• Bitcoin up 1.6% to $30,797

It was a bit of a quiet session as markets are contemplating the reaction to the US CPI data earlier in the week. The dollar slumped in trading yesterday and was under some light pressure early on, before paring losses to sit steadier now.

As things stand, we are seeing some key technical levels being contested across multiple dollar pairs and that could still result in a break lower in the greenback before the weekend. But for now, it looks like we have to wait on the US retail sales later today.

There was just some light pushing and pulling among major currencies with EUR/USD easing from 1.1070 to 1.1045 during the session while GBP/USD fell from 1.2530 to 1.2490 as the dollar regains a bit more poise.

AUD/USD also fell from 0.6790 to 0.6765 while USD/CAD inched higher from 1.3315 to 1.3335 at the moment. As you can see, the changes are relatively light, all things considered.

In the equities space, European stocks are still pushing for further gains while strong bank earnings is helping to see US futures keep calmer, with Dow futures rising at the expense of tech stocks.

It’s over to the next big data to see if we will get the potential dollar breakdown or if the greenback is going to be making a stand ahead of the weekend.

This article was written by Justin Low at www.forexlive.com.

The rotation between value and tech stocks is taking hold as part of the initial reaction to the bank earnings in the past 20 minutes or so. Wells Fargo and JP Morgan reported hefty beats on earnings while not really showing much signs of stress or credit concerns. That will help to ease the mood further after the banking turmoil last month.

Dow futures have risen as a result, up by 0.2%, while Nasdaq futures are down by 0.5% now ahead of US trading. S&P 500 futures are caught in a bind between the two, keeping flat at the moment.

This article was written by Justin Low at www.forexlive.com.

The details for JP Morgan:

• EPS $4.10 (vs $3.38 estimate)
• Adj. revenue $39.34 billion (vs $36.83 billion estimate)
• FICC sales and trading revenue $5.70 billion (vs $5.25 billion estimate)
• Investment banking revenue $1.56 billion (vs $1.54 billion estimate)
• Equities sales and trading revenue $2.68 billion (vs $2.75 billion estimate)

Looking across, PNC also reported a strong earnings beat with the credit details (allowance for credit losses of $5.4 billion was stable) also not really indicating signs of any major worries. That should be a relief for equities, at least with regards to bank stocks, ahead of the open.

However, overall sentiment remains tepid with S&P 500 futures still down 0.1% for now.

This article was written by Justin Low at www.forexlive.com.

The banks are the first to report but I would say that perhaps there will be more scrutiny on regional banks this time around. But now we are getting the earnings report from Wells Fargo.

• EPS $1.23 (vs $1.13 estimate)
• Profit $4.99 billion (vs $3.79 billion a year ago)
• Net interest income $13.34 billion (vs $13.09 billion estimate)
• Revenue $20.73 billion (vs $20.03 billion estimate)

This article was written by Justin Low at www.forexlive.com.

• This comes as lagged price pressures fade out
• Rapid wage growth is keeping core inflation up and will remain high for some time
• This will take some time before easing slowly
• Outlook remains surrounded by considerable uncertainty
• Risks to the growth outlook are tilted to the downside

All things being equal, the ECB is likely to lean more towards a 25 bps rate hike next month. The narrative now is that price pressures are still holding up, in particular core inflation, and that is validating their decision to push with at least one more rate hike.

This article was written by Justin Low at www.forexlive.com.