Daily Market Bulletin – 6 April 2022

Market Developments

Investors were cautious as they digested hawkish Fed commentary and prospects of further sanctions against Russia over the war in Ukraine.

Fed's Brainard made some rather hawkish remarks on Tuesday, which boosted the US Dollar and spooked stock markets. She said that the bank should begin reducing the balance sheet "at a rapid pace as soon as our May meeting". She also noted that inflation is "much too high" and that the committee is ready to take "stronger action" if needed, which was seen as hint to more aggressive rate hikes. [1]

EU Commission President Ms von der Leyen proposed yesterday a fifth package of sanctions, following the "gruesome pictures from Bucha and other areas from which Russian troops have recently left". The plan consists of six pillars, which include a ban on cola from Russia, but no oil embargo.

NATO Secretary General Stoltenberg expects "a new very concentrated Russian offensive in Donbas" and said that Western allies will continue to support Ukraine with "anti-tank weapons, air-defence systems and other equipment". [3]

The Chinese mainland reported 1,415 new COVID-19 cases on April 5 (local & imported), up from 1,235 in the prior day. There were also 19,199 new asymptomatic cases. [4]

The country's services sector contracted in March, as the Caixin Services PMI dropped to 42.0, from 50.2 in the prior month.

Data just released showed that German Factory Orders dropped 2.2% month-on-month, from +2.3% prior (revised).

Stock of Twitter (TWTR.us) gained 2% yesterday after the company revealed that Elon Musk will join its Board of Directors, following his 9.2% stake on Twitter. [5]

Main Asia-Pacific stock markets followed Wall Street lower and European futures are tepid. On the FX space, the US Dollar extends yesterday's Fed-fueled gains and the JPY Basket retreats.

Instruments Snapshot

EUR/USD remains soft below 1.0900.

GBP/USD is cautious, holding above 1.3050.

USD/JPY rises for fourth straight day, trying to take 124.00 out.

USD/CAD is upbeat and reclaims 1.2500, after yesterday's 2022 low (1.2401).

AUD/USD retreats, following Tuesday's RBA-fueled 2022 high (0.7662), but holds 0.7550

NZD/USD also posted 2022 high yesterday (0.7335), but moves on the defensive today, breaching 0.6950.

GER30 is mixed as it covers earlier losses and tries to retake 14,400.

US30 trades with caution below 34,700.

USOIL is constructive above 102.00.

XAU/USD stays on the back foot, testing 1,920.

Economic Calendar Picks (GMT)

The minutes from the Fed's March policy meeting dominate today's calendar (18:00). The bank had then raised rates by 25 basis points, the first hike since 2018. Other than that, we expect Eurozone Producer Price Index (09:00) and EIA US Oil Stockpiles (14:30).

See the economic calendar here.

Nikos Tzabouras

Senior Market Specialist

Nikos Tzabouras is a graduate of the Department of International & European Economic Studies at the Athens University of Economics and Business. He has a long time presence at FXCM, as he joined the company in 2011. He has served from multiple positions, but specializes in financial market analysis and commentary.

With his educational background in international relations, he emphasizes not only on Technical Analysis but also in Fundamental Analysis and Geopolitics – which have been having increasing impact on financial markets. He has longtime experience in market analysis and as a host of educational trading courses via online and in-person sessions and conferences.

References

1

Retrieved 06 Apr 2022 https://www.federalreserve.gov/newsevents/speech/brainard20220405a.htm

3

Retrieved 06 Apr 2022 https://www.nato.int/cps/en/natohq/opinions_194325.htm

4

Retrieved 06 Apr 2022 http://english.www.gov.cn/statecouncil/ministries/202204/06/content_WS624d00aac6d02e5335328d17.html

5

Retrieved 25 Jun 2022 https://d18rn0p25nwr6d.cloudfront.net/CIK-0001418091/8e6028bd-1f8c-4521-b3bd-3a69e84a23d0.pdf

Disclosure

Any opinions, news, research, analyses, prices, other information, or links to third-party sites contained on this website are provided on an "as-is" basis, as general market commentary and do not constitute investment advice. The market commentary has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and it is therefore not subject to any prohibition on dealing ahead of dissemination. Although this commentary is not produced by an independent source, FXCM takes all sufficient steps to eliminate or prevent any conflicts of interests arising out of the production and dissemination of this communication. The employees of FXCM commit to acting in the clients' best interests and represent their views without misleading, deceiving, or otherwise impairing the clients' ability to make informed investment decisions. For more information about the FXCM's internal organizational and administrative arrangements for the prevention of conflicts, please refer to the Firms' Managing Conflicts Policy. Please ensure that you read and understand our Full Disclaimer and Liability provision concerning the foregoing Information, which can be accessed here.

Past Performance: Past Performance is not an indicator of future results.

${getInstrumentData.name} / ${getInstrumentData.ticker} /

Exchange: ${getInstrumentData.exchange}

${getInstrumentData.bid} ${getInstrumentData.divCcy} ${getInstrumentData.priceChange} (${getInstrumentData.percentChange}%) ${getInstrumentData.priceChange} (${getInstrumentData.percentChange}%)

${getInstrumentData.oneYearLow} 52/wk Range ${getInstrumentData.oneYearHigh}