Week to Apr 8th

Dollar and yields surge on hawkish Fed marks. FTSE outperforms

MY CALL THIS WEEK : BUY EURAUD

LAST WEEK

Most equity markets fell this week on hawkish comments from Fed Brainard and also the FOMC minutes where it was reported that 50bp rate hikes “could be appropriate”. The exception was the oil and bank heavy UK FTSE which came within a whisker of a 44-month high. There was little scheduled data, and as the Ukraine stalemate continues, the war fades from traders’ minds (SPX underperformed DAX), and focus is on rate hikes, and inflation which is driving them (see next week). The same factors drove the dollar to a new 11-month high, and yields to a 3-year high, whilst the yield curve retraced last week's move back into positive territory. JPY, gold and silver had inside weeks. Other metals and oil had reduced volatilty as they consolidate off the highs.


WEEKLY PRICE MOVEMENT

The biggest index mover was rate-sentitive NDX which was down 3.59%. The top forex mover EURUSD down 1.59%. Bitcoin and Ethereum pulled back. FANGs underperformed NDX as a whole..

Last week's EURJPY long position lost 0.10%, which means I am ahead 3.84% this year, with 6/13 (46%) wins. This week I am buying the oversold EURAUD

Note we use Google Finance data for daily movements, listing UUP as a proxy for DXY. All references to ‘the dollar’ are based on DXY. The equity and index prices are now based on the cash close each day.

NEXT WEEK

Earnings season starts next week, with as always JPM first out of the door on Wednesday, followed by WFC, C and GS the next day. Also Thursday sees the ECB rate decision meeting and press conference. We have inflation from the UK and China as well as the all-important US, which are all forecast to rise, a miss on this print would be positive for stocks short-term. Finally, this is Easter week, and markets are closed for Good Friday (UK and Germany have a four day break with Monday off as well)


CALENDAR  (all times are GMT, volatile items in bold)

Monday April 11
01:00 BoJ's Governor Kuroda speech
01:30 China CPI (e1.2% p0.9%)
06:00 UK GDP MoM
06:00 UK Ind/Mfr Production
11:00 UK NIESR GDP Est (time approx.)
13:30 Fed Bowman speech
16:00 Fed Williams speech

Tuesday April 12
06:00 UK Claimant Count/AHE/UnEmp (UE e3.8% p3.9%)
06:00 Germany CPI (e7.6% p7.6%)
08:00 ECB Bank Lending Survey
09:00 Germany ZEW Sentiment
12:30 US CPI (Core e6.6% p6.4%)
16:10 Fed Brainard speech
18:00 US Monthly Budget Statement

Wednesday April 13
00:30 Aus Westpac Consumer Confidence
02:00 China Imports/Exports/TB
06:00 UK CPI (e6.6% p6.2%)
06:15 BoJ Governor Kuroda speech
09:30 DE10Y Bond Auction
12:30 US PPI
14:00 BoC Rate Decision/Statement (e0.5% hold)
15:15 BoC Press Conference

Thursday April 14
01:00 Aus Consumer Inflation Expectations
01:30 Aus Jobs/Unemp (UE p4.0%)
04:30 Japan Ind Production
05:00 China FDI (time approx.)
11:45 ECB Rate Decision/Statement (e0% hold)
12:30 US Jobless Claims
12:30 US Retail Sales
12:30 ECB Pres Lagarde Presser
14:00 Michigan CSI (e60.6 p59.4)

Friday April 15
No significant news, markets closed