Overnight Headlines

*USD sets four-week low as dovish Fed messaging continues

*Asian stocks mixed after weak Nasdaq close

*Bumper Australia jobs report helps ASX200

*US Retail Sales in focus  

US equities were mixed with the Dow and its cyclicals rising while the tech-laden Nasdaq suffered after hitting the landmark 14,000 mark. European stocks are set to open modestly higher.

USD continues to attract sellers as bonds dither with some Wall Street sages asking whether we have seen the top in US interest rates in the near term. If so, then USD can fall further as the difference in rates across the world narrows with Uncle Sam. The greenback looks weak and next USDX support lies at 91.31 which is near the bottom of the rising trend channel formed since the start of the year.

Market Thoughts – Bank earnings and sinking Coinbase

The takeaway from yesterday’s bank earnings seems to be about weak loan demand and crucially, warnings about US consumers not spending their most recent stimulus checks, instead tucking these funds away in savings or to pay down debts. This is significant as while most analysts expect another blowout quarter of earnings, it is the forward guidance that is important for the broader market.

Coinbase’s listing coincided with a record price for Bitcoin, which rose to just under $65,000 but the euphoria proved to be short-lived as the stock fell nearly 20% from its opening level to trade at $328, slightly painful for any buyers at the intraday high of $429.

Trade of the Day – FTSE breaking higher

The FTSE100 is set to open in the green today after a decent day Wednesday helped by its large weighting in large-cap oil and mining stocks. Glencore surged over 5% while BP enjoyed 3% gains as oil jumped following an IEA report which saw inventories fall by 5.9 million, far more than the 2.9 million expected. There is also increasing optimism about the rebound in the global demand picture.

An oil breakout and the fact the FTSE100 doesn’t have a huge tech weighting but more financials, industrials and energy companies can push the index higher. Technically, we have broken out of a mini bullish flag formation and are now aiming for new cycle highs and 7,000. And we still haven’t made up all the pandemic losses yet, unlike most other major stock markets so can target 7,400 further out. Put your stop loss below Tuesday’s low around 6,853.

Key Event – US Retail Sales set to skyrocket

Consensus sees a reading of 5.8% in March after sales fell more than expected in February amid bitterly cold weather across the US. A strong rebound is seen in the wake of the stimulus checks sent out in March. An ailing USD might find support in the numbers, more so if we see a risk-off environment.