Risk appetite improves

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Daily News – 23 April 2020

By: Andria Pichidi

Signs that the pandemic peak is behind us? Bounce in oil prices; Awaiting the $484 bln relief package; Some good Earnings news; Expectations that parts of the economy could be seeing phased in reopenings near term; & cheapening in Treasury yields.
Disappointment from Japanese and Australian Flash PMIs (April) record lows, especially in Services
AUD and NZD both getting a wee bid
   – Australia has managed to reduce the infection rate dramatically
   – Australian PM:” back to the safe economy” NZ PM: “looking at all options to stimulate the economy”
   – Australian prelim. Exports for March + 29% (8bln) and imports at +10%
ECB temporarily eases collateral standards. The ECB has announced that until September 2021 it will accept marketable assets below current minimum credit requirements, in order to “mitigate the effect on collateral availability of possible rating downgrades resulting from the economic fallout from the coronavirus (COVID-19) pandemic.”
Dollar losing ground. – Oil recovered by nearly 10%. Asian bond markets mostly declined, as stock markets moved higher and sentiment continued to stabilize. The GER30 is also up 0.4%, although UK100 & US futures are swinging between gains and losses now.

USD Index –topped at 100.63 before moving down to PP 100.35. – Uptrend since 15 April.
EUR – reached 1.0800 bottoms. Currently traded at 1.0823 rejecting the PP 1.0836.
JPY – lack of direction for the 7th day in a row. safe-haven –Trade at 107.80 slightly above PP.
GBP – steady below 20-day SMA. PP at 1.2330, R1 at 1.2385
AUD – rallied to 0.6368 (above R1). PP 0.6310, R2 0.6390
CAD – down to 1.4125- PP at 1.4170 and S1 at 1.4110

Gold – sustains gain above 1700. R1 is at 1719 and PP 1700

USA500 – moves above PP and 2800. R1 at 2834 and S1 at 2745.

TODAY: Preliminary PMIs from Germany, Europe, UK, and the US, along with US Jobless Claims, Home Sales, and Japanese national CPI.

Biggest (FX) Mover NZDJPY (+0.58%) – Broke the R1 at 64.50, after it rebounded overnight from 0.6372. The asset moves above all intraday MAs with the fast MA’s aligned higher. Momentum indicators improve with RSI crossing above 50, and Stochastic crossing into the OB zone. MACD histogram & signal line aligned close to 0-line. Key Resistance area at 64.63-64.70. H1 ATR 0.15, Daily ATR 0.92.


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