Headlines:

• All eyes stay on the bond market
• Reminder: Most European (and other) markets will be off tomorrow
• ECB’s Lane: May decision will depend on three factors
• Japan PM Kishida reportedly not seeking imminent change to monetary policy
• Germany February industrial production +2.0% vs +0.1% m/m expected
• Germany March construction PMI 42.9 vs 48.6 prior
• UK March Halifax house prices +0.8% vs -0.3% m/m expected
• UK March construction PMI 50.7 vs 53.5 expected

Markets:

• CHF leads, NZD lags on the day
• European equities slightly higher; S&P 500 futures flat
• US 10-year yields down 0.6 bps to 3.281%
• Gold flat at $2,020.04
• WTI crude down 0.3% to $80.36
• Bitcoin down 0.8% to $27,920

It was a quiet session as European traders are taking it slow and easy ahead of the Easter holiday starting tomorrow.

There is still a sense of trepidation but it seems like we will have to look to Wall Street to realise any of the caution and fear before the US jobs report on Friday.

The dollar was largely steadier and did little as major currencies also saw rather poor appetite for trading on the session. The aussie and kiwi were the laggards but that carried over from Asia as equities remain more tepid mostly.

European indices are holding slight gains but they aren’t indicative of much after a retreat in the past two days, with the DAX and CAC 40 indices being held back at the highs for the year earlier this week.

The bond market is still the key spot to watch and all eyes are on 10-year Treasury yields to see if the break below the 3.30% threshold can be sustained. If anything else, this has been very much a placeholder session before US trading today and the key risk event tomorrow.

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

In nearly one
month, the Finance Magnates Africa Summit (FMAS:23) will officially be underway
in South Africa. The biggest event of the year will be hosted out of the
world-famous Sandton Convention Centre in Johannesburg, taking place on May
8-10, 2023. The summit will be of particular note for crypto and forex traders
looking to explore potential brokers in Africa.

Africa has seen
a surge in trading activity and the arrival of leading global brokers and
crypto providers. This is hardly surprising given the popularity of these trading
instruments. With the biggest brands all under one roof for FMAS, the timing
has never been better for traders to interact and engage.

If
you have not already done so, see what all the hype is about in Sandton this
May and register
for FMAS:23 today

Forex
and Crypto Traders of Africa Unite

Every FM event
has included an extensive focus on proper trading techniques, demos, the
release of new and exciting trading technologies and platforms for users, and
much more. This will include FMAS:23, showcasing a dedicated content stream
that is tailored towards both forex and crypto traders.

Reasons for
Forex and Crypto Traders to Attend FMAS:23

·Learn about
new trading technologies, platforms, techniques ·

A chance to
engage directly with leading traders, brokers, individuals

·An opportunity
to meet, network with other traders

·Workshops and
trading strategies available on offer for free

Furthermore, FMAS:23
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for the African continent. This also includes a growing swath of potential traders
who are looking to get started, with an opportunity to learn and engage with the best.

Nowhere else do
attendees have the opportunity to speak directly with so many leaders in one
place in Africa. Individuals can also expect to learn about and engage with the
biggest brands from the forex and crypto space.

The event will spotlight
2.5 days of sessions, workshops, panels, discussions, and more, touching on
every corner of the retail trading industry. FMAS:23 is expected to bring in
upwards of 2,000 attendees, 70 exhibitors, and 50 speakers.

To top this all
off, the event will also feature a legendary closing party for all attendees,
complete with live music, entertainment, and much more. This is one event you
will not want to miss. Stay tuned for more updates over the next few weeks as
the in-depth agenda takes shape, or simply to join the conversation surrounding
FMAS:23!

All prospective
attendees are invited to explore in-depth
agenda at length, which is already live and available for access.
See what sessions hold the most appeal – with so many angles and areas of
focus, there is something for everyone.

Do not miss out
on this incredible opportunity to live the life of luxury, fame, and network
with the best in the industry. See you in Johannesburg this May!

This article was written by ForexLive at www.forexlive.com.

According to the CME Fedwatch Tool, the odds of a 25 bps rate hike have fallen to roughly 42% now with the remaining 58% probability siding with no change in interest rates. For some context, the balance of probabilities were more or less flipped at the end of last week after having seen the odds of no change fall drastically from around 85% at the start of last week here.

The decline in Treasury yields can be said to be two-fold. On the one hand, it indicates some degree of economic discomfort brought about by the tightening cycle. And it signals that traders are worried about worsening data points in the weeks/months ahead.

The fallout is largely coming after the banking turmoil, as that seems to be the checkpoint in which markets are adopting in determining that central banks have perhaps gone far enough with rate hikes.

On the other hand, falling rates could reflect the view that markets are anticipating the end to the Fed’s tightening cycle. In this regard, with growing concerns on the economic outlook, markets are sending a message that if policymakers keep going, something else is going to break.

The whole narrative above is still very much burgeoning but it may be one that takes over rather rapidly. I mean, we are already starting to see the switch around that bad news is indeed bad news now.

With the US jobs report in focus tomorrow, a poor reading there might be the biggest signal yet that rate hikes are taking a toll on the labour market and the economy. Coupled with softer inflation indicators so far this week, that might be reason enough for markets to chase a stronger pricing that the Fed will not hike in May.

While that may sound like bad news for the dollar, it is likely to be balanced out by a more risk-off wave across markets. These are certainly interesting times.

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

• It will depend on the inflation outlook
• Then, we have to diagnose the underlying dynamic, not just the overall inflation rate
• And through that, assess how quickly inflation is going to fall
• Thirdly, is how quickly these interest rate increases are restricting the economy and bringing down inflation
• For these reasons, we have no longer indicated or pre-announced what the expectation is for the next meeting or for the upcoming meetings
• The focus should be on understanding every data point that comes in
• If by May, the macro projections remain on track, then a rate hike will be appropriate
• Full transcript

That’s a comprehensive summary of the viewpoint by the ECB at the moment but the fact that most policymakers are angling the narrative to focus on core inflation does implicitly say that they are looking for another rate hike at least.

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

Headlines:

• Bond yields turn lower ahead of US trading
• Aussie still feeling the weight of the RBA decision yesterday
• Third time’s the charm for gold?
• Equities stay more cautious so far today
• ECB’s Vasle: Core inflation is still clearly on an upwards trend
• ECB’s Vujčić: Further rate hikes may be needed to address core inflation
• Germany February industrial orders +4.8% vs +0.3% m/m expected
• Eurozone March final services PMI 55.0 vs 55.6 prelim
• UK March final services PMI 52.9 vs 52.8 prelim

Markets:

• JPY leads, AUD lags on the day
• European equities slightly lower; S&P 500 futures down 0.1%
• US 10-year yields up 1.6 bps to 3.353%
• Gold up 0.2% to $2,023.14
• WTI crude down 0.1% to $80.65
• Bitcoin up 1.0% to $28,551

It was a rather tentative session for the most part as major currencies were more tentative before a late turn in the bond market is sparking some decent action.

We are seeing bond yields trip lower now ahead of US trading, with some watchful eyes on the ADP employment data to come.

That is weighing on yen pairs with USD/JPY slipping from 131.75 earlier to 131.40 levels now with other major currencies also losing some ground against both the dollar and yen. That comes amid a more cautious risk mood, with equities slightly more sluggish.

GBP/USD backed away from the 1.2500 mark again to hold around 1.2475 while the aussie sagged as the post-RBA fallout continues to reverberate. AUD/USD is down 0.8% to below 0.6700 and that inadvertently put a drag on the kiwi as well, which erased its post-RBNZ gains from earlier as NZD/USD fell from 0.6350 to 0.6300 on the session.

Elsewhere, gold is maintaining its composure above the $2,020 mark mostly while oil is seeing a bit more push and pull in keeping above $80 for now still.

On to the next data series ahead of the Friday jobs report then. Anyone fashion a good roulette table for the ADP draw?

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

Keep an eye on the move here as we could see wider reverberations come about later on. USD/JPY is also seen down 0.2% now to 131.45 from around 131.75 earlier in the session. As I mentioned here earlier, this is one of the focal points in markets at the moment with 10-year yields in the US on the threshold.

Besides the usual spillovers to the Japanese yen and US dollar, do keep a watchful eye on gold as it maintains the break above the $2,000 mark from yesterday.

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

On the daily Nasdaq chart below, we
can see that after breaking out of the bull
flag, the market has rallied towards the key resistance level at 12274. The buyers will
want to see a clear break above it to start targeting the next resistance at
13186. The moving
averages are crossed to the upside, so the trend remains bullish and the buyers
are in control.

As long as the US data doesn’t
come out ugly, the buyers seem to be comfortable charging higher. Today we will
see the US ISM Service PMI and it’s a key economic
indicator for the services sector which remained resilient despite the
aggressive tightening and the recession fears.

Nasdaq
Technical Analysis

On the 4 hour chart below, we can
see that we have a trendline now that will be used as a
support for the buyers. If we get a pullback here, the price is likely to
retrace back to the trendline where there is also the red long period moving
average for confluence. The buyers are likely to pile
in there, while the sellers will want to see the price breaking below the trendline
to jump onboard and target the support at 11492.

On the 1 hour chart below, we can
see that the 12014 level is indeed a strong support for the buyers. Not only we
will have the trendline and the 4 hour long period moving average, but also the
38.2% Fibonacci
retracement level. What happens at this level is likely to
decide the next big move. A bounce should bring us to the 12274 resistance if
not higher and a breakout should lead to a selloff back to the 11492
support.

This article was written by ForexLive at www.forexlive.com.

The emphasis on core inflation continues to point to the idea that ECB policymakers are still leaning in favour of another rate hike at least, even if they can’t explicitly say that at the moment.

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

After the setback yesterday, stocks are holding a more tentative and cautious mood so far in European trading. Here’s a snapshot of things:

• Eurostoxx -0.2%
• Germany DAX -0.3%
• France CAC 40 -0.2%
• UK FTSE +0.4%
• S&P 500 futures -0.2%
• Nasdaq futures -0.2%
• Dow futures -0.2%

For the DAX and CAC 40 indices, it is a bit of a light retreat after running up against its highest levels for the year in trading yesterday.

The JOLTS report yesterday was perhaps a reason for the pessimism creeping into equities and that makes for a bit of trepidation ahead of the ADP report later in the day.

That said, I would be remiss not to point out that you can pretty much draw up a dart board and throw to any figure there to get the ADP number these days. It has not been any accurate indicator of what to expect from the non-farm payrolls data for the longest of time now.

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

<p class=“MsoNormal“>On the daily USDCAD chart below, we can
see that after breaking the key <a target=“_blank“ href=“https://www.forexlive.com/Education/technical-analysis-support-and-resistance-20220405/“>support</a> level at 1.3664, the pair just
sold off massively helped also by the rising oil prices. Yesterday, <a target=“_blank“ href=“https://www.tradingview.com/chart/CIPuZN0R/?symbol=NYMEX%3ACL1%21″>oil
even gapped up</a> in a big way following surprise cuts by OPEC+ on
Sunday. </p><p class=“MsoNormal“>The USD is also under pressure as
the market is trading on interest rates expectations at the moment with the Fed
expected to end its hiking cycle at the May meeting barring any awful economic
data. At this point, only very ugly economic data can help the US Dollar as the
market would switch from the rates trade to the recession trade and the USD
would be sought as a safe haven.</p><p class=“MsoNormal“>On the 4 hour chart below, we can
see that the downtrend is well sustained. The <a target=“_blank“ href=“https://www.forexlive.com/Education/technical-analysis-understanding-moving-averages-20220425/“>moving
averages</a> act as resistance and the buyers will want to wait for them to cross to
the upside to give some confirmation of a change in trend. Yesterday we also
got very weak <a target=“_blank“ href=“https://www.forexlive.com/news/is-ism-march-manufacturing-index-463-vs-475-prelim-20230403/“>ISM
Manufacturing PMI</a> data, which may be an early sign that the economic
data are about to turn south again after a bounce in January and February. It
may also be a sign that the recent banking troubles may have indeed caused some
pain. </p><p class=“MsoNormal“>On the 1
hour chart below, we can see that after breaking the support the price started
to trade within a channel. If we get a pullback, the sellers may lean on the
upper bound of the channel and a <a target=“_blank“ href=“https://www.forexlive.com/Education/technical-analysis-using-fibonacci-retracements-20220421/“>Fibonacci
retracement</a> level. The buyers, on the other hand, will want to
see a breakout to the upside before piling in and target the previous support
turned resistance at 1.3664. Tomorrow we have the <a target=“_blank“ href=“https://www.forexlive.com/EconomicCalendar“>ISM Services PMI</a> and if even those tumble, then
we may start to see the market trading the recession.</p>

This article was written by ForexLive at www.forexlive.com.