TD Research discusses its expectations for next week’s ECB policy meeting.
„The ECB is likely to announce that its APP programme will end in May, and prepare markets for a June rate hike,“ TD notes. 
„We continue to like EURUSD downside through the start of Q2 on a mix of drivers. An ECB pivot would anchor a possible low for EURUSD, though a break of the 1.12 high requires settlement on the US terminal rate pricing. That said, a more active ECB is likely to reinforce the lows in EURCHF and would favor buying EURGBP dips towards 0.83,“ TD adds.

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USDCHF moved up to the swing area and reversed The USDCHF moved up on the daily chart extending to a new high for the week in the process. However, that high moved into a swing area (see green numbered circles) between 0.93658 and 0.93822. The high reached 0.9373 and rotated back down. The last 5 highs in the GBPUSD had stalled within that range area. Why not today too? The holding of that level once again is just another notch in increasing that levels importance going forward. Next week be aware. If there is a break, the price should extend higher toward the highs from 2022 and 2021 in the 0.9459 to 0.9472 area. For now, however, the sellers once again are giving the sellers some confidence. Drilling down to the USDCHF hourly chart below, the run to the downside erased the gains and moved lower on the day. The low price, however, did find support buyers near the 50% midpoint of the move down from the March 16 high. That level comes in at 0.93268. The current price is at 0.9340. What now? For the week, the price has been moving higher since basing near the 100 day MA down near 0.9236. We know the high stalled near recent swing highs between 0.9366 to 0.9382, but the 50% midpoint of a move is always an important barometer for buyers and sellers. I am not surprised the buyers on the dip today, came in against that level. IT makes sense. However, if broken going forward/next week it should give the sellers more confidence and have them looking toward the 100 hour MA at 0.93118 (and moving higher). Move below that level and more selling could see the 200 hour MA in traders sites at 0.92844. The USDCHF stalled in the swing area and rotated back down

Headlines:French election poses weekend risk for the euroJapan moves to ban Russian coal importsEU formally adopts new sanctions against Russia, includes coal import banBank of Russia brings down key rate by 300 bps to 17%Markets:USD leads, NZD lags on the dayEuropean equities higher; S&P 500 futures up 0.4%US 10-year yields up 2.5 bps to 2.679%Gold flat at $1,932.30WTI up 0.3% to $95.75Bitcoin down 0.4% to $43,350It was a quiet session for the most part but the dollar is continuing its recent good form as it firms slightly across the board.There were few notable headlines in European morning trade, with the Russian central bank moving to cut its key interest rate from 20% to 17% being arguably the highlight. That comes after the ruble has made a strong recovery in the past few weeks after a massive plunge during the beginning of the Russia-Ukraine conflict.Equities are looking to end the week on a more positive note after the gains in Wall Street yesterday. European indices are up over 1% while US futures are posting slight gains ahead of the open later. But the advance today comes after a tough week for stocks in general.Meanwhile, the bond market selloff is continuing to play out as Treasury yields climb further on the day. 2-year yield are back up above 2.50% and 10-year yields on approach to 2.70% soon enough. The latter is now approach its 200-month moving average @ 2.67% so that is a key level to be wary about.In the FX space, the dollar is seen firming with EUR/USD easing to fresh one-month lows around 1.0850-60 levels. The euro itself has some weekend risk to consider with the French presidential election on the cards on Sunday.GBP/USD is also weighed down as sellers start to take aim at the 1.3000 level. USD/JPY is looking perky as it tries to keep above 124.00 now with buyers hoping to try and retest 125.00 in the bigger picture.Elsewhere, commodity currencies aren’t faring too well either with AUD/USD down near the lows around 0.7460 and NZD/USD down 0.6% to 0.6850 levels. Both the aussie and kiwi are struggling for momentum after a bit of exhaustion following the post-RBA surge earlier in the week.

Just to give a bit of background, Japan is the world’s third-largest importer of coal and Russia is the country’s second-largest supplier. In total, Russia supplies over 10% of Japan’s coal imports.Japan prime minister Kishida says that in banning Russian coal, the country will focus on renewable energy and nuclear power to replace the lost supplies. Those aren’t things that will come overnight but it highlights the long-term planning by many countries now in diversifying away from Russian energy.Coal is obviously the easy step. Oil and gas is an entirely different ballgame but it is one that could be on the cards in the year(s) ahead.Much like the EU, Japan also relies heavily on Russian oil and gas. For some context, the city of Hiroshima imports almost half of its gas supplies from Russia and Tokyo roughly about 10%.It will take time to replace existing contracts and projects that are running at the moment but over time, one can expect more and more countries to continue to lessen their dependency on Russian energy.The question then becomes, what is the long-term outlook for Russian oil and gas? I fear it is going to be a Venezuela situation but considering Putin’s ideals, you never really know what might come next when his back is against the wall.

WTI crude looks set to settle below $100 on the week and from the charts, we are seeing a semblance of a double bottom just below the $94 mark:

That will be an important level to watch before a potential drop towards $90 next. Recent sentiment hasn’t been too kind for the oil market outlook, even if OPEC+ is not going to mess things up. Let’s take stock of the situation.

China lockdowns, geopolitical tensions continue to threaten a further slowdown in the global economy
Rising inflation pressures are also weighing on the consumption outlook
Reserve releases by the US and IEA have led to a narrowing in backwardation spreads i.e. less worries about near-term availability of oil supply

So, while global inventories continue to look rather tight, the factors above are working against oil prices at the moment. There is good reason to expect a pullback but I would say that the main argument still holds. That being the first two factors are things that will pass eventually and the final factor is one that is only a temporary fix. Reserve releases do not help to restore the structural imbalances in the oil market.
As such, I would still side with the view that oil prices are going to stay elevated barring any destruction demand or a crash on recession fears. If there is a scenario like the latter, it would make for a perfect dip buying opportunity. Otherwise, any further pullbacks will also be attractive to scale more into longs in my view.
A push towards $90 may draw in some buyers but I think around the levels of $80 to $85, that is where we will see stronger plays from oil bulls in securing longer-term positions. At least I know I will.

Aims are being achieved and work carried out by military, peace negotiationsRussia continues to be adamant that things are going „on course“ for them. But then again, it is the kind of rhetoric that you have to expect from their side otherwise the alternative would be a sign of weakness.

This was already coming since the start of the week, so it isn’t anything new. The full announcement can be found here.The coal import ban is delayed to August 2022 as mentioned here but it is a start at least. It remains to be seen if the EU will have appetite to go after oil and gas but Germany certainly will be a key stumbling block once again if so.

Monetary policy stance remained very accommodativeLarge number of members held the view that current level of high inflation called for immediate further steps towards policy normalisationIt was argued, that for all practical purposes, three forward guidance conditions have been metA longer period of above-target inflation would lead to increased risk on upward de-anchoringIn such a circumstance, ECB could no longer afford to look through higher inflationThe view was taken that APP purchases had by now fulfilled its stated objectiveNonetheless, it is seen as wise to keep some two-sided optionality on policyFull accountThere are some hawkish mumblings based on the remarks above but recent ECB commentary does not suggest that policymakers are too keen to push the agenda. So, that is making things a bit confusing in my view. I wouldn’t say a lot has happened over the course of the past four weeks but it certainly has perhaps.If the ECB thought that rate hikes could do them some good, they definitely do not share as strongly a view on that now.

Headlines:Bond selloff takes a breather for the time beingEU full ban on Russian coal reportedly to be pushed back to mid-AugustTechnical issues stall EU’s attempt to ban Russian coal but the path forward is evidentJapan to release 15 million barrels of oil as part of IEA-led coordinated releaseChina reaffirms that it opposes all forms of official interactions between US and TaiwanPelosi visit to Taiwan stirs up US-China tensionsBOJ’s Noguchi: Merits of a weak yen on the economy outweighs the demeritsEurozone February retail sales +0.3% vs +0.6% m/m expectedUK March Halifax house prices +1.4% vs +0.5% m/m priorGermany February industrial output +0.2% vs 0.0% m/m expectedMarkets:GBP leads, AUD lags on the dayEuropean equities higher; S&P 500 futures up 0.2%US 10-year yields down 1.3 bps to 2.596%Gold up 0.1% to $1,928.30WTI up 1.5% to $97.63Bitcoin down 0.9% to $43,505Headlines were few and far between on the session as markets settled down on the week, with the bond market selloff cooling and equities finding a bit of a breather after two days of modest declines.Treasury yields are keeping lower while European indices are posting decent gains with S&P 500 futures also seen up 0.2%.If anything else, it just points to a bit of a pause in the recent momentum as the focus stays on the battle between central banks and inflation for the most part.In FX, the dollar was choppy but is now keeping little changed overall with EUR/USD moving down to 1.0865 from 1.0930 before sticking around 1.0890 levels at the moment.USD/JPY is little changed as the pair continues to trade sideways between 123.50 and 124.00 since yesterday.The aussie and the kiwi are laggards with the former stuck around 0.7475-90 against the dollar throughout the session.Fed speakers will be something to watch later on in the day, so keep your eyes and ears peeled in case.

The Merge, the most expensive NFT in the world created by digital artist Pak was sold for $91.8 million USD as nearly 30.000 NFT collectors rushed to get in on the action. And while these numbers leave many in shock and awe, the NFT craze is still far from being over. In fact, did you know that by simply owning an NFT you could be making passive income? There are many ways of having exposure to NFTs, so let’s dig in. What is an NFT? To put it in simple terms, NFT stands for Non-Fungible Token, which is cheeky way of saying that it is a completely unique token that is unable to be duplicated. Now, the version of NFTs which people are familiar with are jpegs, however, it is important to make the distinction that the NFT itself isn’t just the picture you are looking at, rather a token ID on the blockchain which is paired with the image URL and therefore represents the image you are looking at. This means that since there is no image data on the blockchain, what the token is doing is simply pointing to the image file, meaning that it could also point to several other different things such as domain names, the deed to someone’s house, and so forth, which is why they are extremely versatile and likely to revolutionize the very concept of ownership. Investing in NFTs directly While some take an active stance and speculate wildly on NFT markets, trading them much like NFT stocks, passive income is in fact possible too. So, yes, those avatars and cat jpegs and other NFT art might earn you a considerable amount of money if used right. Investing in NFT stocks If you aren’t an artist and find NFT markets confusing, there is another way you can gain NFT exposure: through NFT Stocks. Many companies out there have dwelled into NFTs, either by operating in their marketplace or selling them. Big names include Coinbase Global, Inc (COIN), Draftkings Inc. (DKNG) a sports betting and fantasy sports company, Chiliz (CHZ), and eBay Inc, (EBAY). Role of Blockchain stocks There are many publicly traded companies out there which incorporate blockchain tech into their operations, whether its directly or through the offering of blockchain-related services. Others simply play a role in the crypto industry either by focusing on crypto or fostering blockchain innovation. Some of the most established blockchain stocks are: Nvidia (NVDA), the leading manufacturer of GPUs and graphics cards, Block (SQ), previously known as Square, Mastercard (MA), and IBM (IBM). Where does passive income NFTs fit in? If speculative NFTs stock trading sounds like a FOMO-induced proposition, but there are clever new ways one can earn a steady stream of revenue from other NFT applications. Much like content can be monetized online, content makers can also make NFTs of their works and sell them with the promise that whoever will buy them will get a part of their advertising revenue. The core idea of a passive income NFTs is the notion that having a digital representation of physical asset adds value. As an example, let’s look at the entertainment industry. If an up-and-coming new band is about to release a new hit song they can monetize it on a popular streaming platform, meaning that they will earn a percentage every time someone buys it or streams it (via ads). However, if the artists decide to go on a tangent from traditional means, they can simply turn that song into an NFT and sell part of those monetary rights for a period (or in perpetuity), so the owner of the NFT would also receive his or her cut. This allows for the artists’ audience and fans to engage with the band, to have their skin in the game by investing in their project, and, more importantly, to earn rewards along the way. NFT monetization Accordingly, this logic makes it so that the concept of NFT monetization can be extrapolated into other areas such as social networks or video with creators on Youtube, Vimeo, Odysee or any other platform from the blogosphere, social influencers, and so forth. Consequently, investors can back the creators’ projects in a new and unique way and earn their fair share passively. Real life NFTs and their “leakage” into the real world seems inevitable, and even for those who are short on capital, there is ample opportunity for investment and a consistent, long-term stream of revenue. You just got to play your cards right.