This joins plenty of other participants shifting their views after yesterday’s CPI beat:

• BNP Paribas joins other banks to amend Fed cuts to two this year
  
• UBS expects the Fed to start cutting in September

This article was written by Arno V Venter at www.forexlive.com.

• Tesla Chief Elon Musk to visit India, meet PM Modi this month
• Tesla’s Musk to make announcement about India plant, investments during India trip
• Will meet Modi in the week of April 22 in New Delhi, and will separately make an announcement about his India plans
• Reuters has previously reported that Tesla officials are expected to visit India this month to look at sites for a manufacturing plant that would require an investment of about $2 billion

This article was written by Arno V Venter at www.forexlive.com.

• Russia considers dropping some environmental requirements for gasoline usage to avoid possible shortages
• The measure to reduce environmental standards may bring an additional 10% of gasoline to domestic markets
• adjustment could potentially increase the domestic gasoline supply by 10%, which translates to an additional 300,000 to 350,000 metric tons per month.
• Refinery output in Russia has grown significantly since 2000, with a total production of 275 million tons in the previous year.
• The proposed measures are expected to enhance gasoline production, especially benefiting older refining facilities.
• Loosening environmental standards is seen as a regression from Russia’s 2011 initiative to improve fuel quality and ecological standards through refinery modernization.

This article was written by Arno V Venter at www.forexlive.com.

This article was written by Arno V Venter at www.forexlive.com.

• US mortgage
  market index +0.1 pct to 195.7 in week ended April 5
• US mortgage
  purchase index falls 4.7 pct to 138.7 in April 5 week
• US mortgage
  refinance index rises 9.9 pct to 498.3 in April 5 week
• US average
  30-year mortgage rate rises 10 bps to 7.01 pct in April 5 week

This article was written by Arno V Venter at www.forexlive.com.

• The BoE left interest rates unchanged as expected but with Haskel and
  Mann this time voting for a hold instead of a hike.
• The employment report missed expectations with an uptick
  in the unemployment rate and an easing in wage growth.
• The UK CPI missed expectations across the board but with
  Services inflation remaining sticky, which continues to support the BoE’s
  patient stance.
• The latest UK PMIs showed the Services PMI missing expectations
  slightly and the Manufacturing PMI beating.
• The market expects the first rate
  cut in June.

JPY

• The BoJ finally exited the negative interest rates
  policy as expected
  at the last meeting raising interest rates by 10 bps bringing the rate to a
  target between 0.00-0.10%. Moreover, the central bank scrapped the yield curve
  control and the ETF purchases, while maintaining QE in place.
• The latest Unemployment Rate missed expectations although it
  continues to hover around cycle lows.
• The Japanese PMIs improved further for both the
  Manufacturing and Services measures although the former remains in
  contractionary territory.
• The latest Japanese wage data came in line with expectations.
• The Tokyo CPI, which is seen as a leading
  indicator for National CPI, came in line with expectations.
• The market expects another rate hike
  from the BoJ this year although the timing remains uncertain.

GBPJPY Technical Analysis –
Daily Timeframe

On the daily chart, we can see that GBPJPY bounced
on the 61.8% Fibonacci retracement level
near the lower bound of the rising channel where we had also the red 21 moving average for confluence. The
buyers extended the rally into the 193.00 handle and will certainly keep
targeting the upper bound of the channel around the 195.00 handle. The sellers,
on the other hand, will want to see the price reversing and breaking below the
lower bound to position for a drop into the 187.96 low.

GBPJPY Technical Analysis –
4 hour Timeframe

On the 4 hour chart, we can see that from a risk
management perspective, the buyers will have a much better risk to reward setup
around the trendline where
they will also find the 61.8% Fibonacci retracement level for confluence. The
sellers, on the other hand, will want to see the price breaking lower to
position for a drop into the lower bound of the channel eventually targeting a
break below it.

GBPJPY Technical Analysis –
1 hour Timeframe

On the 1 hour chart, we can see more
closely the recent price action with the pair bouncing on the most recent swing
high level at 192.20. If we get a pullback from the current high, that’s where
the buyers should pile in with a defined risk below the 192.20 level to
position for a rally into new highs. The sellers, on the other hand, will want
to see the price breaking lower to position for a drop into the trendline
around the 191.50 level.

Upcoming Events

Today we get the US CPI report and the FOMC Minutes.
Tomorrow, we will have the US PPI and the latest US Jobless Claims figures. On
Friday, we conclude the week with the UK GDP and the University of Michigan
Consumer Sentiment Survey.

This article was written by FL Contributors at www.forexlive.com.

• Solid
  US job growth: The strong March job numbers hint at robust economic health
  which will potentially delay Fed rate cuts.
• Bond
  yields: Strong growth and higher commodities have pushed yields higher, which
  increases appeal for the dollar.
• Market
  dynamics: Despite a brief delay, there is potential for significant technical
  breaches in key major pairs which suggest readiness for the dollar to
  strengthen, especially if CPI points higher this week.
• Central
  bank policies: Expected dovish shifts from the ECB and BoC contrast with that
  of the Fed and should enhance dollar attractiveness

One risk to
a higher dollar this week is if a strong CPI pushes USDJPY into 152 and
triggers possible intervention. That should only mean short-term pressure on
the dollar but a risk worth considering.

Also think watching global growth is important
for the dollar. There have been green shoots in the data in other parts of the
world which explains some of the recent dollar weakness as well.

This article was written by Arno V Venter at www.forexlive.com.

1. Self-employment drove the weakness (29k drop), which offset a 27k rise in private sector (15k) and public sector (12k) jobs.
2. The soft headline was driven by youths’ (aged 15-24) falling 28k. As youths do not have the same impact in housing and consumer markets, the implication for the drop in youths’ employment isn’t as bad as it would have been if the losses were in the 25+ age group.
3. Quebec youths drove most of the softness by showing 18k fewer jobs.
4. Wages still grew by 4.5%, which is still running at over twice the BoC’s 2% inflation target.

With this
in mind the bank doesn’t think that Friday’s report changes anything for the
BoC.

I agree that one jobs print shouldn’t change
anything, especially looking at the details under the hood. But when we combine
Friday’s job report with the recent CPI deceleration and the lower expectations
of higher inflation by Canadian businesses seen in the Business Outlook survey,
it gives the bank the cover it needs to sound more dovish.

This article was written by Arno V Venter at www.forexlive.com.

The bank
thinks that EURUSD is expensive at current levels, but unless we get strong
guidance for deeper cuts after June the impact might be more short-lived. I share their sentiment in this regard.

They think
that the pair would need an equity-sell off as well as an official start to the
ECB’s rate cutting cycle for a move lower.

There is a
greater chance of a move towards 1.07 compared to a break higher to 1.09.

Personally, I think a lot of bad news is priced
for the EUR, but time will tell.

This article was written by Arno V Venter at www.forexlive.com.

• The Fed left interest rates unchanged as expected at the last meeting with basically no
  change to the statement. The Dot Plot still showed three rate cuts for 2024 and
  the economic projections were upgraded with growth and inflation higher and the
  unemployment rate lower.
• Fed Chair Powell maintained a neutral stance as he said that it was
  premature to react to the recent inflation data given possible bumps on the way
  to their 2% target.
• The US CPI and the US PPI beat expectations for the second
  consecutive month.
• The US NFP beat expectations across the board
  although the average hourly earnings came in line with forecasts.
• The US ISM Manufacturing PMI beat expectations by a big margin with
  the prices component continuing to increase, while the US ISM Services PMI missed with the price index dropping to
  the lowest level in 4 years.
• There’s now basically a 50/50 chance of a rate cut
  in June.

NZD

• The RBNZ kept its official cash rate
  unchanged dropping
  the tightening bias and stating that the OCR will need to remain at restrictive
  level for a sustained period.
• The latest New Zealand inflation data printed in line with expectations
  supporting the RBNZ’s patient stance.
• The labour market report beat expectations across the
  board with lower than expected unemployment rate and higher wage growth.
• The Manufacturing PMI improved in February remaining in
  contraction while the Services PMI increased further holding on in
  expansion.
• The market expects the first cut in
  August.

NZDUSD Technical Analysis –
Daily Timeframe

On the daily chart, we can see that NZDUSD rallied
all the way back to retest the broken support zone now turned
resistance where we have also the confluence of the
38.2% Fibonacci retracement level
and the red 21 moving average. This is
where we can expect the sellers to step in with a defined risk above the
Fibonacci level to position for a drop into new lows. The buyers, on the other
hand, will want to see the price breaking higher to start targeting the 0.6218 resistance.

NZDUSD Technical Analysis –
4 hour Timeframe

On the 4
hour chart, we can see that we got a rejection of the resistance recently and a
pullback into the 50% Fibonacci retracement level and the red 21 moving
average. The price bounced from that support zone following a goldilocks NFP
report and rallied all the way back into the resistance zone. If we get another
rejection from the resistance, we can expect the buyers to lean on the trendline with a
defined risk below it to position for a breakout with a better risk to reward
setup. The sellers, on the other hand, will want to see the price breaking
lower to increase the bearish bets into new lows.

NZDUSD Technical Analysis –
1 hour Timeframe

On the 1 hour chart, we can see that we
have another trendline which has been defining the recent uptrend following the
NFP release. If the price breaks the trendline, we can expect the sellers to
pile in with more conviction to position for a drop into the next trendline.
The buyers, on the other hand, will likely continue to lean on the trendline to
print new higher highs and higher lows.

Upcoming Events

Tomorrow we get the RBNZ Rate Decision, the US CPI
report and the FOMC Minutes. On Thursday, we will have the US PPI and the
latest US Jobless Claims figures. On Friday, we conclude the week with the New
Zealand Manufacturing PMI and the University of Michigan Consumer Sentiment
Survey.

This article was written by FL Contributors at www.forexlive.com.