Treasuries posted strong and very surprising gains, overlooking robust data and a solid rally on Wall Street. It was something of a buy-the-fact trade as hefty data was the well advertised risk (Retail sales surged 9.8% in March, and climbed 8.4% excluding autos & Initial jobless claims tumbled -193k to 576k). The 10-year yield dropped 10 bps to 1.530%, the lowest in a month. The break of key technical levels added to the bid, with some haven demand too amid virus and vaccine worries, along with some geopolitical risks.
USA500 and the USA30 reached record highs thanks to strong data that supported the recovery narrative, along with hefty earnings, and the drop in yields. The USA100 outperformed with a better than 1% jump and back over 14,000 for the first time since mid-February.
As Refinitiv reported USA100 people were all bulled up buying the tech break out yesterday after USA100 has rallied 10%. BUT we should keep an eye on technicals as RSI had reached overbought levels. Elsewhere, Asia markets were largely steady after China reported a sharp acceleration in first quarter growth, though the reading slightly undershot expectations while retail sales bounced strongly last month. For Europe, GER30 and UK100 futures are currently up 0.3% and 0.1% respectively.
In FX markets, EURUSD is little changed at 1.1968, while GBPUSD dropped back to 1.3761. USDJPY is little changed at 108.79. AUD and NZD fell slightly below yesterdays peak. USOIL extend gains to 63.84. Gold held steady near a more than one-month high on Friday, en route to its second straight weekly gain, boosted by a drop in US Treasury yields and a weaker dollar. Turkey’s central bank banned the use of cryptocurrencies – BTCUSD at 60,974.
Today – Today’s data calendar focuses on final Eurozone inflation readings for March and February trade data also for the Eurozone. US Building permits housing stats and Michigan Index also on tap.
Biggest (FX) Mover – (EURGBP@ 07:30 GMT -0. 43%) The asset rally to 0.8710 retesting for a 3rd time the 7-week highs. Intraday the fast MAs aligned higher, RSI is at 66, while MACD is positive but signal line holds at neutral. ATR (H1) at 0.00061 and ATR (Daily) at 0.00488.