Today's Market Updates

The US Dollar began the week with a slight weakness, contrasting with safe-haven currencies like the Japanese Yen (JPY) and Swiss Franc (CHF). Currently, all eyes are on the upcoming Consumer Price Index (CPI) figures. The US dollar is experiencing minor losses, reflecting ongoing market uncertainties as the Federal Reserve maintains a cautious stance in response to evolving economic data. Despite strong labor market data last week, which could potentially delay expected interest rate cuts, Fed officials are emphasizing the need for patience given the resilient economy.

While signs of inflation moderation and economic slowdown are not yet apparent in the US, the Fed is refraining from immediate rate cuts. However, if economic data portrays a robust economy and alters expectations regarding rate cuts, the US Dollar could see further strengthening.

Market attention is focused on the strength of the US economy and the trajectory of Treasury yields, which are experiencing slight increases. Notably, yields on the 2-year, 5-year, and 10-year Treasury bonds. The release of the Consumer Price Index (CPI) data on Wednesday is expected to be pivotal, with forecasts indicating a rise in the headline figure while the core measure is expected to exhibit a cooling trend. This data release is likely to induce volatility in USD dynamics, influenced by shifts in Treasury yields and evolving Fed expectations.

Despite a somewhat negative start to the week for the US Dollar, the overall risk environment has stabilized, and US Treasury yields have shown modest increases across the curve. Traders are closely evaluating recent payroll data, with upcoming events such as the US CPI release, Federal Open Market Committee (FOMC) Minutes, and the European Central Bank (ECB) event looming large on the horizon.

Here's the comprehensive breakdown for Tuesday, April 9:

AUD/USD: The Australian Dollar showed significant strength on Monday, buoyed by a notable improvement in market sentiment and the absence of major economic events. As Tuesday unfolds, investors are keenly eyeing the release of Westpacs Consumer Confidence Index and the Consumer Confidence Change tracked by NAB. These indicators often provide valuable insights into the health of the Australian economy and consumer sentiment, influencing the direction of the AUD/USD pair. Technically, the pair appears to be demonstrating bullish tendencies, with buyers aiming to challenge the crucial resistance level at 0.6625.

NZD/USD: The New Zealand Dollar encountered a substantial decline of 25% quarter-over-quarter in the first quarter of 2024, as revealed by the Quarterly Survey of Business Opinion (QSBO) conducted by the New Zealand Institute of Economic Research (NZIER). Despite some signs of recovery, the broader outlook for the currency pair remains bearish. Market participants are closely monitoring the 0.6051 resistance level, where bears are likely to seek selling opportunities, potentially driving the NZD/USD pair lower in the near term.

EUR/USD: The Euro initiated the week on a strong footing, reclaiming ground against the US Dollar and revisiting the 1.0860 region. This upward momentum was largely attributed to a weaker USD, which provided support to the single currency. Traders are eagerly anticipating the release of US CPI data on Wednesday, as it is expected to offer valuable insights into inflation trends and potential shifts in interest rate expectations. Additionally, the European Central Bank (ECB) is scheduled to announce its decision on the Main Refinancing Operations Rate during its April meeting on Thursday, further shaping the trajectory of the EUR/USD pair.

GBP/USD: The British Pound experienced a notable rally on Monday, surging to two-day highs near the 1.2660 level. Despite this positive movement, the impact of the BRC Retail Sales Monitor's positive figures on the currency market is yet to be fully realized. Key levels to watch for the GBP/USD pair include 1.2617 and 1.2718, which serve as significant support and resistance levels respectively, influencing the pair's price action in the coming sessions.

USD/CAD: The Canadian Dollar registered moderate gains on Monday, driven in part by the release of upbeat Ivey Purchasing Managers' Index (PMI) data on Friday. This positive economic indicator helped offset the impact of favorable US Nonfarm Payrolls figures on the USD. Amidst a relatively calm start to the week and a subdued appetite for risk, the USD/CAD pair witnessed some downward pressure, hovering below the key resistance level at 1.3598. Market participants are now monitoring for bearish signals that could potentially push the pair towards the 1.3522 support level.

USD/JPY: Building on its gains from Friday's trading session, the USD/JPY pair managed to close above the critical resistance level at 151.70. However, the Japanese economic docket remains active, with the release of key indicators such as the Consumer Confidence gauge and Machine Tools Orders on the agenda for April 9th. Positive data releases for the Japanese Yen could prompt a reversal in the pair's upward trajectory, potentially pushing it back below the 151.70 level. Conversely, disappointing data could reinforce bullish sentiment and pave the way for further upside movement.

USD/CHF: The USD/CHF pair continued its ascent for the second consecutive session, advancing towards the 0.9050 level. Geopolitical developments, such as Israel's decision to withdraw additional troops from Southern Gaza amid international pressure, have contributed to a reduction in market tensions. Furthermore, renewed peace talks between Israel and Hamas in Egypt have alleviated concerns that may have weakened demand for the safe-haven Swiss Franc (CHF). As a result, the USD/CHF pair appears to be benefiting from improved risk sentiment and geopolitical stability, potentially setting the stage for further upside potential in the near term.

Here's a detailed breakdown of the commodities market:

US Oil: Crude oil prices sustained a second consecutive daily descent on Monday, primarily propelled by a waning sense of geopolitical unrest. This downturn emerged against a backdrop of easing tensions in pivotal oil-producing regions, contributing to a palpable reduction in overall market uncertainty. The abatement of geopolitical pressures served as a pivotal catalyst in diminishing the risk premium typically associated with oil prices, thus facilitating a decline in crude oil values.

Gold: Following an unprecedented surge that propelled gold prices to record highs of $2,353.94, marking a significant test of the 161.8 Fibonacci extension, the precious metal experienced a notable retracement on Monday. Despite encountering formidable headwinds such as heightened US Treasury yields and a perceptibly diminished likelihood of further rate cuts by the Federal Reserve, gold's bullish momentum persevered. The retracement underscored the complex interplay between prevailing economic factors and the enduring appeal of gold as a safe-haven asset amid evolving market conditions.

Silver: In contrast to gold's retracement, silver prices continued their upward trajectory for a second consecutive day, surging to $28.08. This impressive bullish movement transpired despite concurrent advances in US Treasury bond yields, indicative of robust investor appetite for the precious metal. The sustained upward momentum in silver prices underscores the enduring allure of precious metals as viable investment vehicles amidst prevailing market uncertainties and evolving economic landscapes.

US Stocks:

Major US stock indices kicked off the trading week with marginal gains, underpinned by a cautious optimism prevailing in the market. However, investors are treading carefully as they await the release of crucial US Consumer Prices Index (CPI) data scheduled for Wednesday, which could provide significant insights into inflationary trends and potentially impact market sentiment. Here's a detailed look at the performance of key indices:

SP500: The S&P 500 index is cautiously navigating towards the 200-moving average on the hourly chart, indicating a tentative approach by market participants. While minor gains have been observed, the index appears to be encountering resistance as it maneuvers through this critical technical level.

Dow Jones: Continues its consolidation phase, albeit with a slight uptick in Monday's trading session. Despite minor gains, the index remains within a range-bound pattern, reflecting a period of indecision among investors as they await further catalysts to guide market direction.

NASDAQ: Similar to its counterparts, the NASDAQ index posted minor gains at the start of the week. However, the index continues to consolidate as it aims to complete a bullish move towards the key resistance level at $18,286.70. Market participants are closely monitoring price action in anticipation of a potential breakout or reversal from this critical level.

Meanwhile, the US Dollar resumed its downward trajectory on Monday, signaling a cautious stance among investors ahead of several key economic releases later in the week. Scheduled for April 9, market participants are eagerly awaiting the release of the NFIB Business Optimism Index, RCM/TIPP Economic Optimism Index, APIs weekly report on US crude oil inventories, and a speech by Minneapolis Fed Governor Neel Kashkari. These data points are expected to provide valuable insights into the health of the US economy and may influence the future trajectory of the US Dollar in the forex market.

In summary, while the US stock market started the week with modest gains, the prevailing cautious sentiment underscores the importance of upcoming economic releases in shaping market dynamics. Investors are advised to remain vigilant and closely monitor developments in both the equity and currency markets for potential trading opportunities.

Here's today's scheduled economic news and reports:

Tuesday, April 9:

TENTATIVE - USD - RCM/TIPP Economic Optimism

08:00 GMT+3 - JPY - Consumer Confidence  

09:00 GMT+3 - JPY - Prelim Machine Tool Orders

09:45 GMT+3 - EUR - French Trade Balance

13:00 GMT+3 - USD - NFIB Small Business Index

19:30 GMT+3 - CHF - Gov Board Member Schlegel Speaks