Daily Market Outlook, April 27, 2023
Banking sector concerns are once again clouding the risk landscape as Wall Street witnessed a late day sell off as investors were reluctant to hold meaningful risk exposure given the pressure on regional banks, however, as was the case the day before an overnight bid has developed driven by better than expected earnings numbers from Facebook parent Meta platforms, Asian equity markets are managing to maintain marginal gains with the onshore Shanghai Comp the stand out performer as China’s State Council have announced plans to underpin employment while offering preferential loans to businesses who demonstrate expansion plans that aid in stabilising the employment market.
European investors have another session that lacks meaningful macro drivers as the econ slate is once again scant, the Eurozone industrial confidence index is expected to nudge higher in April while the services metric is expected to retreat modestly, however, this data isnt likely to move the needle for European Central Bank policymakers who remain anchored to a rate rise strategy at next week's ECB meeting.
Stateside focus will be firmly on US Q1 GDP, investors are becoming increasingly cautious that the US’s powerhouse economy is teetering on the edge of recession, however, markets expect todays print to show a 2% annualised growth rate, the balance between inventory build up and final demand looks set to be more positive than the numbers seen in the backend of 2022, with January’s upside surprise in consumer spending accounting for the majority of the uplift, investors are concerned that the January surprise in consumption was an anomaly driven by unseasonal weather conditions that will be neutralised by a deceleration in consumer momentum in the back half of the last quarter.
The Bank of Japan will announce its latest monetary policy position overnight, with the inaugural meeting under new BoJ Governor Ueda. Markets are poised for the BoJ to announce a review of their ultra easy monetary policy and its economic impact, it is widely believed that this will act as first step on the road to reversing their monetary policy stance to start to align with the restrictive conditions employed by other major central banks, however, Ueda has indicated that he is not planning an immediate moves at this meeting but investors will parse his comments for signals as to the timings of a change in the monetary policy road map.
FX Options Expiries For 10am New York Cut
(In bold represent larger expiries, more magnetic when trading within daily ATR)
A massive 40-billion between 1.09-1.11 expire through month end
EUR/USD: 1.0900-10 (1BLN), 1.0975 (600M), 1.1000 (1BLN)
1.1040 (1BLN), 1.1125 (878M). USD/CHF: 0.8900 (400M), 0.9000 (684M)
GBP/USD: 1.2390 (396M), 1.2410 (246M), 1.24250-40 (671M)
USD/CAD: 1.3565-75 (921M), 1.3625 (232M)
USD/JPY: 133.00 (786M), 133.20-35 (1.1BLN), 133.50 (304M)
134.00 (618M), 135.00 (1.4BLN)
CFTC Data As Of 21/04/23
USD net spec long pared slightly in Apr 12-18 period, $IDX -0.38%
USD offered amid speculation Fed nearing end of hike cycle
EUR$ +0.55% in period, specs +1,023 contracts now long 164,361
$JPY +0.3% in period specs +338 contracts, now short 56,869
GBP$ -0.04% in period, specs +3,700 contracts, flips to +1,302
$CAD -0.56% specs +10,346 contracts, now short 46,233
BTC +0.77% in period specs +633 contracts, short cut to 489 (Source RTRS)
Overnight News of Note
Republicans Pass Debt-Ceiling Bill Aiming To Spark Talks With Biden
Goldman Says Big US Tax Haul Means Debt-Limit Deadline In July
BoC Refrained From Hike At Last Meeting To Wait For More Evidence
China’s Industrial Profits Keep Plunging As Prices Decline
Former Deputy Chief Sees Chance Of BoJ Tweaking Forward Guidance
Bank Turmoil Seen Crimping Credit At Double Powell’s Estimate
Euro Near One-Year Peak As US Economic Risks Weigh On Dollar
Bitcoin Extends Recent Bout Of Volatility In Climb Back Toward $30,000
Oil Prices Find Some Support After Heavy Losses On US Recession Fears
Meta Surges As Sales, Forecast Beat Estimates On Ad Recovery
EBay Rises After Second-Quarter Revenue Outlook Tops Estimate
First Republic Faces Potential Curb On Borrowing From Fed
Samsung Flags H2 Recovery After Record Chip Loss In Q1
(Sourced from Bloomberg, Reuters and other reliable financial news outlets)
Technical & Trade Views
SP500 Bias: Intraday Bullish Above Bearish Below 4040
Primary support is 4000
Primary objective is 4207
Below 3985 opens 3950
20 Day VWAP bearish, 5 Day VWAP bearish
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EURUSD Bias: Intraday Bullish Above Bearish below 1.0990
Primary support is 1.07
Primary objective is 1.1128
Below 1.0700 opens 1.0660
20 Day VWAP bullish, 5 Day VWAP bullish
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GBPUSD Bias: Intraday Bullish Above Bearish below 1.2410
Primary support is 1.2250
Primary objective 1.2659
Below 1.22 opens 1.2010
20 Day VWAP bullish, 5 Day VWAP bullish
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USDJPY Bias: Intraday Bullish above Bearish Below 133.00
Primary resistance is 135.15
Primary objective is 129.15
Above 136 opens 137.90
20 Day VWAP bearish, 5 Day VWAP bearish
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AUDUSD Bias: Intraday Bullish Above Bearish below .6685
Primary resistance is .6750
Primary objective is .6565
Above .6775 opens .6825
20 Day VWAP bearish, 5 Day VWAP bearish
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BTCUSD Intraday Bias: Bullish Above Bearish below 28400
Primary support 26500
Primary objective is 30500
Below 26300 opens 25800
20 Day VWAP bullish, 5 Day VWAP bullish
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Patrick has been involved in the financial markets for well over a decade as a self-educated professional trader and money manager. Flitting between the roles of market commentator, analyst and mentor, Patrick has improved the technical skills and psychological stance of literally hundreds of traders – coaching them to become savvy market operators!