FTSE -18 points at 7285
DAX -45 points at 12185
CAC -10 points at 5111
Euro Stoxx -9 points at 3480
The barrel of WTI crude rallied to $52.94 following the US strike on Syria, as a response to the Syrian gas attack on civilians earlier this week. Money flew into safe haven assets, such as the yen, gold and the US Treasuries.
Gold broke the 200-day moving average ($1260) on the upside. The positive breakout could gather further momentum toward $1280. Softer US yields are also supportive of the yellow metal. The US 10-year yields slipped below 2.30% in New York for the first time since November 30th.
In Japan, the average earnings slowed to 0.4% year-on-year in February from 0.5% printed a month earlier, keeping the Bank of Japan (BoJ) doves alert.Nikkei (+0.66%) and Topix (+1.01%) traded in the green, as the USD/JPY rebounded after hitting 110.13 earlier in the session. As such, the USDJPY weighed on the 110.00 mark for the third session since March 26th.
Softer US yields and safe haven flows could keep the yen bid into the weekly closing bell. Decent option barriers trail below 112.00 at today’s expiry and could further weigh on the pair. Stops are presumed below the 110 mark and could send the pair toward its 200-day moving average (119.40) if broken.
Chinese stocks traded mixed; Hang Seng erased 0.75% while Shanghai Composite (+0.29%) recorded light gains. The meeting between US’ Trump and China’s Xi appeared to be a positive step for US-China relationships. According to the latest news, China could offer the US companies a better access to its market, especially in agriculture and automobile sectors. Time will tell whether Xi’s visit to Mar-a-Lago could melt the ice away and soften Trump’s sharp tone vis-à-vis China.
UK and the European stocks are set for a negative open this Friday.
The UK’s manufacturing and industrial data are due in London and are expected to have improved compared to last month’s contraction. Solid read could give a reason to GBP-bulls to fight back the 1.25 offers against the US dollar. The 200-day moving average (1.2565) could be a reasonable target, if the 1.25 resistance is cleared.
The daily technical bias remains positive, yet the MACD (Moving Average Convergence Divergence) indicator warns that the positive momentum is currently losing pace. Support is seen at 1.2420 (major 38.2% retracement on March rise) and 1.2405 (100-day moving average).
The FTSE rolling index reversed earlier losses and could fill in an eventual negative gap at the open, on the back of improved demand in mining and energy stocks.
In the US, the major talking points are the US nonfarm payrolls (NFP) and the Fed Dudley’s speech. The US economy is expected to have added 174’000 nonfarm jobs in March, versus 235’000 reported previously. The expectations are soft, given that the last 12-month average stands at 185’000. On a side note, the ADP report, released on Wednesday, surprised on the upside. Although the correlation between the ADP and the NFP figures are not statistically significant, there could be a positive surprise in the US data before the weekly closing bell.
In addition, Fed’s Dudley will speak later in the session. After the March minutes mentioned the Fed’s will to start shrinking the size of its balance sheet, Dudley warned that the latter could be a ‘substitute for short-term rate hikes’ and warned that the balance sheet strategy could bring the Fed to decide whether ‘to take a little pause in terms of raising short-term rates’.
As such, Dudley could dent the short-term USD appetite if he gives any hint regarding the timing or the size of the balance sheet reduction.
Quick glance at technical on LCG Trader:
GBP/USD: watch 1.2450 and 1.2420.
Gold spot intraday: further upside with targets at 1273 and 1278
Crude oil (WTI) intraday: upside prevails with targets at 53.38 and 53.75 in extension.