Stephen Innes
SPI Asset Management
Equities
The dust seems to have settled in Asian equity markets after the running of the equity Bulls was triggered by renewed trade dialogue between the US and China and the Fed that managed to out-dove an already dovish leaning market as investors have moved into wait and see mode.
Overnight President Trump laid down the law overnight, and in no uncertain terms told both Japan and China that it's as much their problem as the US's to protect the Straits of Hormuz which suggest the G-20 will have another significant issue to iron out beyond trade. Not to mention that not so delicate question in Hong Kong regarding the extradition bill.
But with little, if any G-20 risk premiums getting baked into the equity markets equation markets continue to trade on an even keel so far this week.
Gold flow update
The GLD ETF buying remains stupendous after its most massive inflow last Friday which hit eye-watering 35 tons. We expect further weakness in the greenback as US rates continue to fall, and this will be extremely promising for Gold markets as the one moth XAU-DXY just beached -70 % this morning.
Asia Currency Markets
Currency volumes in CNH are light with spot and forward trading in tight ranges, but CNH has underperformed a basket of Asia currencies especially the high yielders as this is one area in the market’s traders continue to price in trade war risk premiums.
Flow into Asia FX remain robust, as local currency markets are benefiting for dovish Fed that brings forward rate cut expectation for several regional central banks and triggered a flurry of Fixed Income demand creating a very harmonious and fluid backdrop for local capital markets.
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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.