Fundamental and political wrap: N.Korea back on the map and GBP/USD vulnerable towards 21-D SMA

From a fundamental standpoint, it has been a rather active day in the headlines, from trade talk, Fed speakers, Central Banks to key data surprises.

Firstly, US Stocks have continued to rally, with the DJIA now up to the 100-D SMA, (although closing -0.16%), and the S&P is through the 100-D SMA, (industrials and energy sectors the strongest. The S&P 500 components are expected to see earnings growth of 17.3% for the period, the fastest rate of expansion since 2011). 

Besides earnings, investors have focussed on North Korea again on Wednesday. There were reports that Central Intelligence Agency Director Mike Pompeo took a secret trip to meet with North Korean leader Kim Jong Un in Pyongyang over Easter. Apparently, Pompeo went to discuss the terms of Kim’s upcoming summit with President Donald Trump, which is aimed at ending North Korea’s nuclear-weapons program, these people said. The summit is expected to be convened “probably in early June” or before and it will be the first time that a serving U.S. president will meet with a North Korean supreme leader.

As far as US data went, the Fed’s Beige Book was released and showed that economic activity remained at a modest to moderate pace. However, markets were looking for concerns about trade and tariffs and indeed, the Book showed that nine of the 12 regional banks expressed concerns about tariffs and the tit for tat approach between Bejing and Washington. There was also the surprise UK inflation drop that has muddied the outlook for interest rates in the UK which hit cable hard and leaves the pound vulnerable ahead of retail sales on Thursday - watch the rising 21-D SMA and ascending support line, 1.4140's. Then, the BoC was taking the limelight as far as Central Banks went on Wednesday when holding rates steady at 1.25% but saying that rate hikes will be coming. 

As far as the dollar goes, it has been in a tighter range and less eventful o the charts on Wednesday, trading between 89.448 - 89.777, slightly higher on the day +0.10%, closing the NY session at 89.60.

Key headlines (Sources: LiveSquawk)

• Fed's Quarles says Cryptocurrencies currently do not pose serious risks to financial stability
• Fed's Quarles smaller banks should get different liquidity rules
• Fed's Kaplan: US growth to moderate in 2019, 2020
• Fed's Bullard: FED needs to debate yield curve issue right now
• Fed's Dudley: now see higher 'neutral' policy rate of about 3 pct
• Fed Beige Book: most districts reported wage growth as only modest
• BoC: maintains overnight rate target at 1.25 pct
• BoC Poloz: interest rates may need to remain below neutral range
• CNBC sources: us targeting NAFTA deal in next 3 weeks
• Nikkei: the US is said to seek denuclearize N.Korea by 2020
• ECB's Villeroy: following a central course of gradual policy normalization
• Five Star leader Di Maio: he is ready to form a government with Lega.
• BoE's Brazier: 1pct counter-cyclical capital buffer remains adequate
• BoE's Kohn: potential risk from Brexit that assets 'may need to be repriced'
• BoE's Taylor: Brexit is a major source of tail risk