Russell Shor

The SPX500 had charted a higher trough followed by higher peak. This put the index into uptrend. However, the latest chart action has charted a lower peak. Some weakness has crept in, with market participants unwilling to take price higher than the previous higher peak.

FXCM’s CHN50 basket may be charting a top, with a potential head and shoulders pattern. This pattern is a reversal pattern, suggesting a reversal to the downside. We are watching the neckline – a break below will signal the pattern’s completion and will be bearish.

Left shows the daily Ger30 chart. It is positioned in its bullish channel between the upper blue and red bands. Its RSI is above 50, which is the bullish side of the oscillator. However, the last eight trading sessions have drifted sideways in consolidation. This may be setting up a platform to take prices higher, given the positive indications.

There is regulatory pressure that bitcoin and other cryptocurrencies face. The regulation of decentralized finance (DeFi) platforms, which are crucial in cryptocurrency trading, may be reinforced by a proposal put forth by the SEC, according to recent reports.

UK headline CPI came in above 10%; forecasts were for a single digit print. EUR CPI also suggest sticky elements to inflation. ECB and Fed official’s commentary were hawkish in nature. The job market is still tight but initial unemployment claims have started to tick up. Markets will be looking at US GDP and core PCE for direction. This week includes Government Ueda’s first BoJ meeting and it is a…

There is an air of uncertainty, with participants unsure of what comes next for markets. A large part of this is that markets are hesitant of how Fed monetary policy plays out and are looking at Q1 GDP and core PCE for direction (released Thursday and Friday at 12:30 GMT).

The latest data shows that the LEI declined by 1.2% in March to 108.4. This follows a decline of 0.5% in February. From September 2022 to March 2023, the LEI was down 4.5%, which is steeper than the 3.5% decline for the previous six months.

Given the lag on the EU inflation front, the ECB will need to be more aggressive than the Fed for at least the medium term. This is reflected in the spread between the German (proxy for EU) and US 2-year notes. This is because short-term borrowing costs react quickly to changes in monetary policy.

Given the size of its contribution to GDP, monitoring the health of consumption is important. By and large there are worrying signs. Total vehicle sales and underemployment are showing fragility in terms of their momentum and chain store sales are negative. The existing homes sales series has bounced somewhat but is yet to pass the threshold implying an underlying positive momentum. Consumer sentiment has turned positive but there is a…

Bitcoin has dropped to around $29,140 as the markets turn risk-off, which suggests that cryptocurrencies are still sensitive to macroeconomic factors. Bitcoin passed $30,000 last week, hitting close to $31,000, but has struggled to maintain these gains amidst profit-taking and consolidation.

Yesterday saw a higher-than-expected average earnings index (3m/y) out of the UK at 5.9% (vs 5.1%-forecast). Today inflation has proved persistent with headline CPI (y/y) at 10.1% (vs 9.8%-forecast) and core CPI (y/y) at 6.2% (vs 6.0%-forecast). This suggests at least another 25bps hike from the BoE in May.