DXY was down overnight:
The Australian dollar is an out of control rocket versus every cross:
Gold is holding its break line:
Oil is broken:
Dirt did a bit better:
Miners too:
EM stocks are lagging:
As junk erodes despite the Fed:
Bonds were all bashed:
As stocks roar into recovery:
Westpac has the wrap:
Event Wrap
COVID-19 update: The global case count continues to roll over, with latest data from John Hopkins University indicating 75k new confirmed cases worldwide on 26 April, vs 87k the previous day and vs 102k at the peak on 24 April.
Italy’s PM said it would begin lifting a nationwide lockdown on 4 May. New York’s Governor said it could start reopening for business on 15 May.
The Bank of Japan committed to unlimited JGB purchases and increased its corporate bond purchases to JPY20tr. The policy rate was left at -0.1% and the 10yr JGB yield target was also unchanged at around 0%. It cut its economic growth forecast to -5% to -3%, with inflation expected to fall back to -0.7% to -0.3% in the 2020/2021 fiscal year.
US Dallas Fed April manufacturing survey was close to estimates at -73.7 (est. -75.0, prior -70.0) – a record low since this survey began in 2004.
Event Outlook
US: The market anticipates that wholesale inventories were wound down by 0.5% in March. Following this, the February update of the S&P/CS home price index will be published. Whilst price growth is expected to be robust (market f/c 0.35%), the read predates the impact of the virus, and a deterioration is on the horizon. Turning to sentiment, the April Conference Board consumer confidence index is expected to fall to 87.9 as lockdowns and social distancing continue to bite. Finally, the Richmond Fed Index is set to collapse to -40 in April, in line with other regional surveys.
Markets are trading the virus and liquidity curves not the economic one.
On the former, the US is nowhere near opening back up and, if it does, the virus will run even wilder:
But, you know, v-shaped recovery…
The Australian dollar will run until it all hits the reality brick wall at once.
