Market Update – April 12 – Yields & USD Drive On, Stocks, JPY & Eur Lower
By Tue, 12 Apr 2022

Yields remain bid, supporting USD as Stocks sink. JPY & EUR remain weak. Oil recovers, Gold holds gains. –

  • Stocks tanked (NASDAQ worst again -2.18%) Weak in Asia (Nikkei -1.72%) & UK & European FUTS. lower (0.2 to 0.6%).
  • Yields rally as curve steepens – US 10-yr  now at 2.824%.
  • EUR fell again after minor rally following French Election result. USD bid elsewhere.
  • USD bid especially vs. weaker JPY (over 125.50 ), AUD, CAD & NZD.
  • Oil  recovered from key support, up over $4/barrel as Shanghai eases some lockdowns.

Biden told Modi that buying Russian oil is not in India’s “interest” & will help. Macron & Le Pen go on Election Blitz, Morrisson kicks off Australian Election campaign.  Austrian PM meets Putin for 90 mins.  New populist PM in Pakistan raises the min. wage. Zelenskiy says tens of thousands have died in Mariupol.

Overnight – JPY PPI inflation beats  – 9.5% vs. 9.2%  & 9.7% previously. In line UK Wages & Unemployment with Claims lower.  AUD big boost for Business Confidence (16 vs 13)

  • USDIndex rallied to test new high 100.17 , trades at 9100.12 now.
  • US Yields 10-yr closed higher again at 2.78, up again now to 2.824%.
  • Equities – USA500 -75.75 (-1.69%) at 4412. –  US500 FUTS 4393. Technology stocks & Consumer Discretionary led decline, TSLA  -4.85%, NVDA -5.2% AT&T +7.46%
  • USOil – Trades at $97.30 following a dip to $93.00, Shanghai eases some lockdowns.
  • Gold – gyrated from $1969 to $1940, yesterday , back to $1958 now.   
  • Bitcoin continued to decline from key 45k to trade at 39.88k now. 
  • FX markets – EURUSD back to test 1.0900 now from 1.0835 on Friday. USDJPY breaks key 125.00 to trade at 125.20 and Cable sinks back to test 1.3000 as USD bid continues. 

European Open – 

Today – US CPI, (1.2% m/m 8.4% Y/Y) – But watch the CORE figures for any sign of actual weakness. Speeches from Fed’s Barkin & Brainard.

 

Biggest FX Mover @ (07:30 GMT) EURJPY (+0.99%) Recovering EUR and weaker JPY combine to push pair from 134.35 lows on Friday to 136.60 now. Next resistance 137.00 MAs aligned higher, MACD signal line & histogram higher, RSI 79.50, OB & rising, H1 ATR 0.254, Daily ATR 1.54.

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Stuart Cowell

Head Market Analyst

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