The NY session was dominated by positive bank earnings news that elicited a stellar rally in shares ahead of the long holiday weekend. One of the major US banks announced 1Q earnings projections that doubled what analysts had expected and this sent equities flying. The S&P jumped +3.8% in the session and closed solidly above 850, what is now short-term support. What was interesting is that other markets did not follow this risk taking reaction closely. Gold barely budged and was sitting just -$1.50 lower by 879/880 near the session close. US Treasuries also sold off just modestly with the 10-year yield adding 6bps to 2.92% and the 2-year up 2bps to 0.95%. This lack of follow-through in other assets makes the equity rally seem dubious to say the least.
Currencies were also very atypical in their reaction to higher equities. EUR/USD sank more than -90 pips to 1.3160 and about 30 pips off the intraday lows. The 1.3110/00 area looks like the next pivotal level here in terms of support and things could get uglier below there. The yen crosses were a mixed bag with dollar strength helping USD/JPY add 20 pips to 100.40 while EUR/JPY shed about -60 points into the 132.00/10 zone. Commodity currencies caught a nice bid as oil followed stocks higher. USD/CAD dropped more than -70 pips to 1.2240/50 and remains a hair above the critical 1.22 support zone. AUD/USD meanwhile added 70 pips and was trading just below 0.72 ahead of the NY close.
Upcoming Economic Data Releases (Asia Session) prior expected
- 4/9 23:50 JN BoJ Monetary Policy Meeting Minutes for March
- 4/9 23:50 JN Japan Money Stock M3 YoY MAR 1.10% 1.20%
- 4/9 23:50 JN Japan Money Stock M2 YoY MAR 2.10% 2.20%
- 4/9 23:50 JN Bank Lending Banks Adjust YoY MAR 4.40% - -
- 4/9 23:50 JN Bank Lending incl Trusts(YoY) MAR 3.50% - -
- 4/9 23:50 JN Bank Lending Banks ex-Trust Y% MAR 3.80% - -
