Market Movers ahead
After a hectic week on the data front, we enter a slightly quieter period.
Inflation will be the main focus in the Nordic economies, especially in Sweden, where inflation is expected to fall to -0.3%. In light of this, we expect the Riksbank to cut interest rates in July. We do not expect rates to be adjusted at Wednesday’s meeting.
Minutes from the Fed’s March meeting will be the attention grabber in the US, with readers keen to get some insight into the central bank’s surprise on the interest rate outlook.
We look for slightly higher inflation in China as the effects of the Chinese New Year disappear from the data.
Chinese export figures for March are expected to show growth and together with money supply figures support the picture of an improving economy in Q3.
Global macro and market themes
After significant economic and financial uncertainty early this year, optimism is again returning to the financial markets – both in Europe and in emerging markets, where equities are again rising.
The ECB yet again refrained from further easing at its meeting on 3 April, but we still see it as likely that the ECB will take action sometime in the next six months. Inflation remains far below target.
Deflation is on the horizon, but we estimate that a period of modest deflation may not necessarily be that problematic for the economy.
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AUD/USD remained bid above 0.6500
AUD/USD extended further its bullish performance, advancing for the fourth session in a row on Thursday, although a sustainable breakout of the key 200-day SMA at 0.6526 still remain elusive.
EUR/USD faces a minor resistance near at 1.0750
EUR/USD quickly left behind Wednesday’s small downtick and resumed its uptrend north of 1.0700 the figure, always on the back of the persistent sell-off in the US Dollar ahead of key PCE data on Friday.
Gold holds around $2,330 after dismal US data
Gold fell below $2,320 in the early American session as US yields shot higher after the data showed a significant increase in the US GDP price deflator in Q1. With safe-haven flows dominating the markets, however, XAU/USD reversed its direction and rose above $2,340.
Bitcoin price continues to get rejected from $65K resistance as SEC delays decision on spot BTC ETF options
Bitcoin (BTC) price has markets in disarray, provoking a broader market crash as it slumped to the $62,000 range on Thursday. Meanwhile, reverberations from spot BTC exchange-traded funds (ETFs) continue to influence the market.
US economy: slower growth with stronger inflation
The dollar strengthened, and stocks fell after statistical data from the US. The focus was on the preliminary estimate of GDP for the first quarter. Annualised quarterly growth came in at just 1.6%, down from the 2.5% and 3.4% previously forecast.