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Another Bout Of Inflationary Data Puts Further Pressure On BoE To Raise Rates Again

Another lacklustre handover from Wall Street left Asian equity markets trading with a tepid tone overnight. The Nikkei ran into supply early on, as data for Japanese manufacturing did little to inspire risk appetite as the number once again showed the sector remains anchored in negative territory. Losses in the property and tech sector continued to weigh on the Hang Seng nursing losses of over 1% with the mainland Shanghai Comp also heading for a 1% close in the red as investors pare risk exposure ahead of US Treasury Secretary Yellen, who is set to give a speech later today on US/China Economic ties. 

Just released UK inflation data has added further pressure to the BoE coming in hotter than expected at 10.1% versus an expected 9.8%, sparking another flurry of hawkish bets from investors. This data comes on the back of employment data that also suggested a return of inflationary pressures. Markets are now close to fully pricing a 25bps move by the BoE at their May meeting, notably, BoE dove Mann speaks later today on climate change and monetary policy.

Eurozone CPI inflation figures for March will be the focus for European investors this morning with final readings set for release. Market consensus is expecting confirmation of preliminary readings which suggests a decline in the headline rate to 6.9% from 8.5%, the lowest levels for the past twelve months. The challenge is likely to come from Core inflation which remains elevated at levels far exceeding twelve-month comparisons. It is the Core level of inflation that is front and centre on the ECB’s hawkish members' radar, while the doves on the board will point to the retreat in headline numbers. Several ECB speakers are on the deck today, with Chief Economist Lane having already made comments this morning about the need for further rate rises in the Eurozone to continue the fight against inflation.

The data docket in the US is scant with no tier-one releases. US investors will parse the Fed Beige Book which may provide insight into economic prospects including any impact from recent concerns about US regional banking stability. After the close of trading in New York investors will receive earnings from Tesla. With Elon Musk's latest comments about AI could there be a surprise announcement about how this technology could enhance the Tesla offering in the near future? However, at its core, the business needs a decent consumer landscape to thrive, with consumer headwinds increasing and recent price reductions doing little to inspire sales, there are concerns that the recent test of $200 for the stock was a little stretched in the near term!
 

FX Options Expiries For 10 am New York Cut 

(In bold represent larger expiries, more magnetic when trading within daily ATR)

• EUR/USD: 1.0930-40 (1.3BN), 1.0975-80 (725M), 1.1000-15 (1.2BN),
• 1.1030 (488M), 1.1050 (1.9BN), 1.1080-85 (900M)
• USD/CHF: 0.9225-35 (1.6BN)
• EUR/GBP: 0.8810 (370M), 0.8900 (300M)
• GBP/USD: 1.2450 (803M), 1.2500 (400M)
• USD/CAD: 1.3445-55 (1BN)
• USD/JPY: 133.35-45 (900M), 134.00 (1BN), 135.00 (461M)
• GBP/JPY: 162.50 (510M)
   

Overnight News of Note

• US Futures Inch Downward Digesting Latest Round Of Earnings
• Asia Markets Trade Mixed As Fed Officials Divided On Hikes
• Fed’s Bowman: Doubt Benefit Of Central Bank Digital Currency
• More US Consumers Starting To Fall Behind On Loan Payments
• House GOPs To Vote On Debt Limit, Spending Cuts Next Week
• Sec Yellen to Deliver Major Speech on US-China Economic Ties
• House China Committee War-Games Taiwan Invasion Scenarios
• China, Russia Defence Ministers Pledge To Increase Military Ties
• Canada Faces Massive Strike As Public Service Union Walk Out
• Australia Recession Probability Ease To 35% Amid Policy Pause
• Large Japan Manufacturers Still Gloomy, External Demand Ebbs
• Treasury Positioning Gulf Widens As Debate Rages On Fed Path
• Meta Prepares More Layoffs Across Facebook, WhatsApp, Insta
• Netflix Sees Mixed Earnings As Password Crackdown To Expand

(Sourced from Bloomberg, Reuters and other reliable financial news outlets)
 

Technical & Trade Views

SP500 Bias: Intraday Bullish Above Bearish Below 4100

• Primary support is 4000
• Primary objective is 4207
• Below 3985 opens 3950
• 20 Day VWAP bullish, 5 Day VWAP bullish

(Click on image to enlarge)

EURUSD Bias: Intraday Bullish Above Bearish below 1.09

• Primary support  is 1.07
• Primary objective is 1.1128
• Below 1.0700 opens 1.0660
• 20 Day VWAP bullish, 5 Day VWAP bearish

(Click on image to enlarge)

GBPUSD Bias: Intraday Bullish Above Bearish below 1.2300

• Primary support  is 1.2250
• Primary objective 1.2659
• Below 1.22 opens 1.2010
• 20 Day VWAP bullish, 5 Day VWAP bearish

(Click on image to enlarge)

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

(Click on image to enlarge)

AUDUSD Bias: Intraday Bullish Above Bearish below .6696 

• Primary support  is .6620
• Primary objective is .6814
• Below .6560 opens .6450
• 20 Day VWAP bearish, 5 Day VWAP bullish

(Click on image to enlarge)

BTCUSD Intraday Bias: Bullish Above Bearish below 29100 

• Primary support 23000
• Primary objective is 30500
• Below 23000 opens 22400
• 20 Day VWAP bullish, 5 Day VWAP bullish

(Click on image to enlarge)

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