Financial markets kicked off Q2 more quietly than expected. Equity markets around the world are generally higher, including the US. Tech stocks are higher, bolstered by news that Elon Musk took a 9.2% stake in Twitter. Prices of bonds are mixed around the world. The middle part of the US yield curve (2x10’s at -3 bps) is less inverted. The dollar is higher against the European currencies, but lower against commodity currencies, as oil and gold gain in price. The US Q1 earnings season starts this week.
Monday – US Factory Orders, Durable Goods
Tuesday – Reserve Bank of Australia policy decision
Wednesday – FOMC minutes from March meeting, Eurozone PPI
Thursday – US Initial Jobless Claims, Consumer Credit, Eurozone Retail Sales
Friday – Canada Employment data
April 4, 2022
EUR/USD 1.0994 GBP/USD 1.3117 USD/CAD 1.2488 AUD/USD 0.7548 USD/JPY 122.74 USD/CNH 6.3744 USD/ILS 3.2052 USD/MXN 19.7504 USD/CHF 0.9257 USD/INR 75.5488 USD/BRL 4.6148 USD/SGD 1.3567 USD/DKK 6.7650 USD/SEK 9.4079 USD/NOK 8.7050
The dollar index is higher, as key currencies of the index – EUR, SEK and JPY – are all slightly weaker. The commodity currencies - NOK, CAD, AUD and NZD - are all slightly higher versus the dollar. Today’s release of economic data including Factory and Durable Goods orders came in weak, but as expected. Markets seem quiet, as investors digest the latest central bank and Ukraine news.GBP
The UK pound has remained in a narrow range since Friday’s close. There were no key economic releases today. Traders have reduced positioning, as they digest today’s comments by BOE Governor Andrew Bailey, which were interpreted as less hawkish than previously thought.EUR
Despite higher Eurozone equity markets, the euro is lower. Investors continue to be concerned about downside risks related to the war in Ukraine. Sanctions on Russia may expand after weekend shocks of Russian atrocities on Ukraine civilians. Traders await Eurozone PPI and Retail Sales later this week.CAD
The Canadian dollar is higher on the back of higher prices of oil and gold, which offset depressing Bank of Canada’s Business Outlook data.ASIA/PACIFIC
The Japanese yen is slightly lower, but trades within a narrow range around 122.50. Traders are increasingly wary that the rise in the USD/JPY may be overextended, as expectations of higher US bond yields may be fully baked into the rate of the currency pair.
For more analysis on FX markets or information regarding SVB's FX services:
See all of SVB's latest FX information and commentary at www.svb.com/trends-insights/foreign-exchange-advisory
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