Trump Lays into Fed again

The US president laid into the Fed again over the weekend, repeating his criticism of the central bank for tighteningmonetary policy last year. According to Trump the US stock markets would be up an ‘additional’ 5,000-10,000 points if the Fed had taken a different course of action.  I am assuming of course, that he’s talking about the Dow Jones, and not the S+P 500, but who knows with Trump hey? Anyway more on thatin a minute after I touch on where FX markets signed off last week and where they are this morning.

The dollar managed to rebound off its intraday lows as the EURUSD stalled just shy of 1.1325 and later closed back underneath 1.13. As much as the EURUSD seems like it wants to push higher its still being held in check by a number of factors, not least its continued failure to make a significant move above its 200 weekly moving average which comes in now at 1.1341.

Nevertheless, it still wasn’t an especially positive close for the USD index, which ended the week just below 97.00. The GBPUSD didn’t close above 1.3125, despite lifting to as high as 1.3133 during the session, the pair later ended the week at 1.3074. The price is a little higher this morning and that’s probably due to this week likely being a benign one on the Brexit news front I guess.

The GBPEUR did manage to hold onto that 1.1550 level I noted in Friday’s update with the low on the day being set at 1.1551. The price has bounced a little overnight, but we aren’t talking by much yet, with the rate around 1.1575 as I write this update today. The USDJPY did manage to trade above that 112.04- 200wma I also noted, and in fact and because of the shifting price dynamics, that 200 weekly moving average has now fallen to 111.98. Consequently, the close on Friday at 112.02 was actually above that.

However, and despite solid gains for Japanese equity markets overnight, the USDJPY has not made any headway past 112.10 and slipped back slightly, below 112 again as the European morning gets underway. However, by and large the JPY remains on the back foot still and that coupled with solid equity gains across Asia overnight has helped to push gold a little lower again.

So, its not exactly an exciting FX market vista right now and with the long Easter weekend fast approaching, I don’t suppose many operators are up to doing much this week anyway. Meanwhile, the recent rally in oil prices looks like it might be running out of steam a bit and that could have implications for stocks if the two markets remain as closely correlated as they are right now. To better see that in black and white as it were, please take a look at the chart below, I have showed you before, which tracks the price of WTI compared to the price of the US S+P 500.

As you can see the two markets (WTI denoted by white line and the S+P by the yellow one) are close bedfellows still and where one has gone the other has followed, but as to whom is leading whom is not that clear to me. However, on the assumption that the correlation between the two remains largely intact, you can just imagine where the price of oil might be right now if Trump had his way with where he thinks the stock markets should be!  All I can say is, if thatwere the case, then I’d sure be one step closer to driving electric as indeed we all will in the coming decade I suppose?

As much as all of us in the UK continue to wince from reaching our new found status; as the political laughing stock of the planet, I watched Ed Balls continue to expand his media career (just as well for all of us I think!) on the telly last night. It was certainly quite illuminating to see him hob knob his way around Mar-a-Largo. So, we think we’ve got problems? However, whilst we could probably solve whatever those areright now with some proper leadership, I am not sure the same remedy would work over there?

Anyway, enough said I think. So, this week activity is likely to be significantly curtailed across all markets as we head closer to the Easter break. However, there are one or two economic releases (noted below) which might shift the dial and certainly the Chinese Q1 growth estimates due out in the early hours on Wednesday will be scrutinized very closely for further clues on the state of the economy there. That’s especially so given the latest concerns raised by the IMF over the global growth outlook.

Most markets will be closed on Friday and because of the UK Holidays on Friday and on Monday, I will adjust accordingly the timing of any ensuing articles/commentary. Meantime,Tiger is back!  

Important Economic Releases Due this week

16/04- 2.30am RBA-April Policy Meeting Minutes

16/04- 9.30am UK March Unemployment Report

16/04- 10.00am German April ZEW Economic Growth Expectation Index

17/04- 3.00am China Q1 GDP Estimate

17/04- 9.30am UK March CPI. RPI and PPI Inflation Reports

18/04- 2.30am Australian March Unemployment Report

18/04-9.30am UK March Retail Sales Report

18/04- 1.30pm US March Retail Sales Report