Daily Market Outlook, April 26, 2023
Asian equity markets are clinging to modest gains, this is following a less than inspirational handover from Wall Street as US investors hit the sell button into the close as banking contagion concerns resurfaced, as First Republic Bank shed another 50% of its already decimated share price as the beleaguered bank confirmed it is considering a $100 billion in asset sales to sure up its liquidity position, the late sell off in US markets found some support after the close of New York trading as robust earnings from Microsoft and Google saw US futures markets recover some of the late losses.
UK investors will focus on the CBI distributive trades survey for April this morning after last month’s report pointed to a modest uptick in optimism among retailers who anticipated a potential lift in new orders, markets will be looking for a continuation in this narrative, especially given last weeks GFK survey which printed a 12 month high in consumer confidence albeit form historically depressed levels.
Once again the Eurozone data docket has no tier one releases scheduled this morning, investor focus will shift Stateside with MBA mortgage applications set to give another indication as to whether there is a plateau in the US housing market. US durable goods orders and the goods trade balance for March are set for release later today, these updates come ahead of tomorrow’s first look at Q1 GDP. Markets are looking for durable goods to nudge higher to 0.7/1% after a disappointing 1% drop seen in February's reading. The goods deficit should show a slight improvement from around $90bn to $92bn in February. Markets are currently pricing for a US economy that should deliver a circa 2% increase in activity on an annualised basis, principally driven by an initial bout of consumer activity at the start of the year, while it appears this strength may have dissipated somewhat into the second quarter.
Investors will parse Facebook parent Meta’s earnings after the close in New York as they look to see if they are keeping up with fellow tech giant’s Microsoft and Google's upbeat performance, as the race for AI dominance and cost cutting savings should remain front centre in the case for claiming shareholder support.
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 (2.6BLN), 1.0925-40 (2.6BLN), 1.0950 (2.5BLN)
1.0955-60 (1.7BLN), 1.0970-75(1.4BLN), 1.1000 (1.5BLN), 1.1030-45 (2.1BLN)
USD/CHF: 0.8925 (610M), 0.8990-0.9000 (800M)
GBP/USD: 1.2350 (487M), 1.2400-10 (718M)
AUD/USD: 0.6625-30 (589M), 0.6650-60 (1.2BLN), 0.6700 (839M)
USD/JPY: 133.00 (584M), 133.40-50 (839M), 134.00 (397M), 134.40-50 (500M)
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
First Republic Bank To Weigh Up To $100 Billion In Asset Sales
Fed To Publish Review Of Silicon Valley Bank Supervision April 28
ECB’s Vujcic: ECB Has ‘No Choice’ But To Raise Rates Further
Brussels Set To Rebuff German Calls For Tougher Debt-Reduction Targets
BoJ's Ueda Sees Tough Balance In Combating Cost-Push Inflation
Australia’s Core Inflation Cools, Vindicating RBA’s Rate Pause
Dollar, Yen Buoyed As Bank Sector Fears Put Havens Back In Vogue
Oil Holds Drop As Demand Weakness Spurs Talk Of Refinery Cuts
Asia Stocks Set For One-Month Low And US Futures Rise
Alphabet Shares Rise On Revenue Beat As Ad Sales Recover
Microsoft Profit, Sales Top Estimates On Strong Cloud Demand
Texas Instruments Investors Upbeat In Face Of Slow Recovery
Visa Posts Jump In Quarterly Profit On Higher Transactions
Quants Are ‘Out Of Ammo’ For Buying Stocks, Goldman Warns
Alibaba Cutting Cloud Prices As Much As 50% To Drive User Growth
(Sourced from Bloomberg, Reuters and other reliable financial news outlets)
Technical & Trade Views
SP500 Bias: Intraday Bullish Above Bearish Below 4115
Primary support is 4000
Primary objective is 4207
Below 3985 opens 3950
20 Day VWAP bullish, 5 Day VWAP bearish
.png)
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 bearish
.png)
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
.png)
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 bullish
.png)
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
.png)
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
.png)
Disclaimer: The material provided is for information purposes only and should not be considered as investment advice. The views, information, or opinions expressed in the text belong solely to the author, and not to the author’s employer, organization, committee or other group or individual or company.
Past performance is not indicative of future results.
High Risk Warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75% and 75% of retail investor accounts lose money when trading CFDs with Tickmill UK Ltd and Tickmill Europe Ltd respectively. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Futures and Options: Trading futures and options on margin carries a high degree of risk and may result in losses exceeding your initial investment. These products are not suitable for all investors. Ensure you fully understand the risks and take appropriate care to manage your risk.
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!