Fundamental View
Yesterday’s action was relatively subdued with the biggest move being the sell-off in equities heading into the US cash open. Bond yields continued to rise as T-notes and Bunds continued their trend lower, trading against conventional expectations. We saw a strengthening in the ISM manufacturing with no immediate reaction but the catalyst for the majority of equity moves yesterday seemed to be a fall in vehicle sales posted by Ford, reporting sales figures at -2.0% against the expected 5.8% increase. General Motors reported a build in sales but underwhelmed market participants with a reading of 4.2% against the expected 5.9%. The seasonally adjusted annual rate for vehicle sales in February also fell from 16.7m annual figure to 16.16m and the January number of 16.56m. The lift in crude allowed energy stocks to pare losses but could not halt the grind lower in other sectors, allowing the S&P to extend lower. A surprise move came from the Ukrainian central bank who raised their benchmark rate from 19.5% to 30% in a move to stave off rising inflation and halt the bleeding of a depreciating currency.
Today’s View
This morning we saw Services PMI readings from mainland Europe and the UK; the Italian figures posted below expectations across both the Services and Composite number; France posted a marginal beat on the Composite expectations but it was Germany which had not only the most significance but also the largest miss on expectations. German services posted 54.7 against the expected 55.5 for the services number and 53.8 against 54.3 for the composite. This allowed the DAX to extend its move lower and test S1 with some weight. This also allowed the euro to weaken against the dollar, bringing a proxy dollar strength move into the GBPUSD currency pair. The UK also posted a miss on expectations and GBP weakened further, halting around the low 23rd February low once momentum expired. Ahead we have US ADP Employment change, Services PMI, ISM non-manufacturing composite and the Department of Energy Crude Oil Inventories. There is a slight chance of a lack-lustre print with regards to the employment number as the US are still recovering from the spell of bad weather and with a bank holiday contained with the month, it is likely that an in-line to slight miss could be probable. The API figures from last night were mixed with a low reading from Cushing, but builds in gasoline. This makes the DOE release this afternoon unclear; although the headline would suggest a drawdown overall, we are loathe to recommend trading these instances as previous weeks have proven that supply data can cause price to react contrary to the fundamental announcement.
Amplify Trading is a Limited company registered in England and Wales. Registered number 6798566. Registered address: 50 Bank Street, 3rd Floor, Canary Wharf, London, E24 5NS. Information or opinions provided by us should not be used for investment advice and do not constitute an offer to sell or solicitation of an offer to buy any securities or financial instruments or any advice or recommendation with respect to such securities or other financial instruments. When making a decision about your investments, you should seek the advice of a professional financial adviser.
Recommended Content
Editors’ Picks
EUR/USD drops below 1.0800 after German Retail Sales data
EUR/USD has come under fresh selling pressure and trades below 1.0800 after the data from Germany showed that Retail Sales declined by 1.9% MoM in February. Resurgent US Dollar demand is adding to the downside in the pair. US data are next in focus.
GBP/USD stays weak near 1.2600 amid market caution
GBP/USD remains defensive near 1.2600 in European trading on Thursday. The hawkish tone from Fed Governor Christopher Waller keeps the US Dollar afloat amid a cautious trading environment ahead of key US data releases and the Good Friday trading lull.
Gold price holds strength ahead of US core PCE inflation
Gold price holds onto gains near $2,200 in Thursday’s European session. The precious metal exhibits firm footing ahead of the United States core PCE Price Index data for February, which will be published on Friday.
XRP price falls to $0.60 support as Ripple ruling doesn’t help Coinbase lawsuit against SEC
XRP programmatic sales ruling by Judge Torres was completely rejected by another US Court that ruled in favor of the SEC in a lawsuit against Coinbase.
Portfolio rebalancing and reflation trades emerge into Q2
Yesterday’s price action pointed at a possible end-of-quarter portfolio rebalancing as the session saw the laggards of the quarter like Apple and Tesla gain, and the stars like Microsoft and Nvidia retreat.