Japanese Yen Extends Losses

The Japanese yen took it on the chin on Friday, as USD/JPY jumped 0.90%. The yen has edged lower on Monday and fell as low as 134.22, its lowest level since March 15th. With expectations rising that the Fed will raise rates in May, the yen could remain under pressure and fall closer to the symbolic 135 line.

Sunset Market Commentary

Equities losing some steam and USTs underperforming are giving the dollar an edge. DXY rises from 101.57 to 101.83 and EUR/USD slips from 1.10 at the open to 1.0955 now.

New Zealand Services PSI Declines

New Zealand’s services sector saw expansion levels ease in March. The BusinessNZ PSI (Performance of Services Index) fell to 54.4, down from 55.8 in February but well above the 50.0 line which separates contraction from expansion. According to Business NZ, the drivers behind the decline were a weakening economy, price increases and an uncertain economic landscape.

Dollar's Return to Growth?

The Dollar Index has rallied on the news to 101.55 (+0.9% from Friday’s lows), and EURUSD is trading near 1.0950, back below the important 1.10 ground level. GBPUSD has also pulled back 100 pips below 1.2500.

Chinese Economy Grows Again

The Chinese economy expanded more than expected in Q1 growing 2.2% q/q vs 2.0% q/q consensus and up from 0.0% q/q in Q4. Consumer spending in particular looks strong. Retail sales rose 10.6% y/y in March. Data confirms that Chinese economy is up and running again after the long period of lockdowns that ended at the beginning of the year, while still growing slower than it did before the crisis.

Is Faster Chinese Growth Good News?

The Chinese GDP growth accelerated from below 3% to 4.5% in Q1, versus 4% penciled in by analysts, the industrial production rose 3%, retail sales by more than 10% - which we saw in LVMH and Hermes results as well last week. Both numbers were better-than-expected, and the unemployment rate fell more than expected, as well.

UK Labour Data Published This Morning Printed Strong

UK labour data published this morning printed strong. Employment in the 3 months to February was strong (3M/3M change 169k). Wage growth also surpassed the consensus (weekly earnings ex-bonus 6.6% vs 6.2% expected).

AUD/USD Short-term Uptrend Intact Supported by China's Growth Spurt

The growth spurt from China reopening from its abandonment of stringent COVID-zero policy and implementation of stimulative policies late last year have continued to bear fruition. Today’s release of key China data indicates a robust internal economic environment coupled with its strong export growth for March that surged to an eight-month high of US$ 315.60 billion.

Mixed Data for China and UK Sees Markets Tread Water in Europe

The UK jobs report was also a mixed bag, with wage growth remaining stubbornly high - and with upward revisions - but unemployment unexpectedly ticking higher to 3.8%. The BoE will no doubt be frustrated at the lack of progress on wages - particularly excluding bonuses - but if the move higher in unemployment is sustained, the additional slack in the labour market may give them confidence that they will come down.

Crypto Market is Quickly Finding its Feet

Bitcoin has been correcting its previous rally, falling back to $29K early Tuesday. From this level, it has been on a buying spree and has now risen to $29.6K.