The economic calendar will end the week with a bang as seen in this 27 April Market Moving Fundamental Events Analysis, as governments in the Eurozone, United Kingdom, and the United States release headline indicators. What is the first major report of the day?
27 April, HotForex – Bond as well as equity markets in Europe remain underpinned by a dovish leaving ECB presser yesterday and 10-year Bunds have dropped a further 1.6 bp this morning and are trading at 0.573%, the 2-year is down -0.1 bp at -0.581%, the 5-year Bobl is down -0.5 bp at -0.038%.
European Markets Outlook
Curve flattening trades are still at play and Bunds are outperforming Treasuries and JGBs as well as other Eurozone markets. European stock futures meanwhile are moving higher after a largely positive session in Asia as earnings reports underpin the tech sector in particular.
Weaker than expected French GDP numbers only added support for bonds, but doesn’t seem to have dented sentiment on stock markets. The calendar is pretty packed today, with more GDP numbers out of the U.K. and Spain, as well as German jobless data and Eurozone ESI economic sentiment.
Dollar majors are at near net unchanged levels heading into the London interbank open. EURUSD late yesterday traded below 1.2100 for the first time in early January, extending the latest phase of losses which were seen in the wake of the dovish-tilting guidance of ECB President Draghi yesterday, following the central bank’s April policy review.
Recent EURUSD losses have been driven mostly by dollar outperformance, underpinned by the mix of looser U.S. fiscal policy and Fed tightening, though the comparatively less hawkish/dovish stance of the ECB has been one of the bearish fundamental pillars. USDJPY has remained buoyant but below the 11-week high that was seen yesterday at 109.46.
The BoJ left policy on hold at its policy review today, but it removed the timeframe to achieve CPI target following its policy review today. AUDUSD punched out a new four-month low at 0.7538. Data showing Chinese industrial profits at a 21-month low weighted on the Aussie.
Main Macro 27 April Market Moving Fundamental Events Analysis
- German Unemployment Data- Expectations – a renewed decline in the German jobless number of -5K in April, with the unemployment rate likely to hold at a record low of 5.3%.
- UK GDP – Expectations – growth rates of 0.3% q/q and 1.4% after respective Q4 figures of 0.4% q/q and 1.4% y/y.
- Speeches out of ECB Lautenschläger, Merch, SNB Jordan, BoE Carney and MPC Haldane
- US GDP and PCE – Expectations – Q1 GDP is expected to slow to a 2.1% rate of growth, after the 2.9% Q4 clip, with a moderation that extends the seasonal pattern of Q1 weakness. Q1 PCE is expected to slow to a 2.6% from 2.7% Q4.
Support & Resistance Levels
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