EU Daily Market Wrap - 25th April 2019

EU Daily Market Wrap - 25th April 2019

Today's Highlights

  • AUD Holiday Market Closed ;

  • BOJ Excludes Hike Until Spring 2020;

  • Riksbank Says Rate Hike will Come Later than Planned;

  • 3M Reports Disappointing Earnings Slashing Guidance for 2019;

  • US Durable Goods  Jump in March;

Macro Review

Another day in the market dominated by turbulence in the EM Currency space as concerns over a global slowdown revamp underscored by a confluence of weaker economic data. European traders woke up to a weaker than expected South Korean GDP print - the lowest since the financial crisis.

Overnight, we also had the Bank of Japan, hinting no hikes until spring 2020. Which came after yesterday dovish turn of the Bank of Canada downgrading their forward guidance for this year. Moreover, the Central Bank of Sweden this morning announced that it would resume QE in 2020 excluding hikes this year. To conclude, Turkish lira also crashed against the dollar, after the central bank dropped hints to tight monetary policy. Thus, weakness in foreign currencies led to significant inflows in the US Dollar. 

Global equities traded mix amid a negative performance in Asian markets, after South Korea GDP surprisingly contracted in 2019Q1. As a consequence all major European indices came under pressure early in the session but recovered just before the close as traders scrapped off weaker earnings in the US. In fact, US Equities showed some weakens at the open, after 3M posted weaker than expected earnings ($2.23 vs $2.48 expected).  Tough day in the FX market, were we saw renewed US Dollar strength as  major central banks across the world turn dovish putting their domestic currency under pressure. The USD Dollar Index touched the 98 level today also supported by a jump in March of US Durable Goods (2.7% vs 0.7% expected). All G10 major FX pair found support around key areas putting a break to recent selling activity. Crude Oil rally lost steam amid risk-off sentiment;

Gold broke back above the 1280 level amid preference for safe heaven assets;

The Day Ahead

  • US Advanced Q1 GDP

  • US Michigan Consumer Sentiment

  • US Earnings: Exxon Mobil, Chevron 

EU Close

We had a few questions today in regards to the shortlist of candidates for the replacement of Mark Carney. Click HERE for more insight from Head of Market Analysis Anthony Cheung.

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