Fed and China Driving Risk-Off | Morning Express | 4/22/22
Posted: April 22, 2022, 8:18 a.m.
- Fed Chair Powell, at the IMF conference, said “appropriate to move a little more quickly”. He added that a 50-basis point hike is on the table and it is “essential to restore price stability”.
- Bill Baruch joined the TD Ameritrade Network yesterday and discussed why the Federal Reserve should move quickly over the next 3 months.
- U.S. Dollar Index sets new high, highest since March 2020 whipsaw.
- U.S. 10-year yield hit 2.975% overnight, did not take out early Wednesday 2.981%, yet.
- U.S. 10-2-year curve flattening this week by 23-basis points.
- Eurozone Flash PMIs for April topped estimates. Although German Manufacturing was light at 54.1.
- IMF Meeting continue, ECB President Lagarde makes comments at 8:00 am CT
- U.S. Flash PMIs for April due at 8:45 am CT.
- Russia targets aim at entire south of Ukraine, would paralyze the country’s access to ports.
- China rolls out new containment plan in Shanghai to battle virus, WSJ article. U.S. Dollar +2.4% against the Yuan this week in best week since August 2015.
- After that move in Dollar/Yuan in August 2015, equity markets tanked the following week.
- Earnings from Verizon and American Express beat top and bottom estimates, but stocks are both lower by about 2% premarket.
E-mini S&P (June) / NQ (June)
S&P, yesterday’s close: Settled at 4390.50, down 65.00
NQ, yesterday’s close: Settled at 13,728.25, down 276.50
- Maintained cautiously Bearish Bias through the short-term rebound but noted yesterday we would flip cautiously Bullish upon a close above major three-star resistance at 4519.75-4525.75.
- S&P failed in front of that resistance but set a higher high than last week. Last week’s low was 4375.50 and a close below there brings an outside bearish week.
- S&P has not taken out the Sunday night low and still responding to major three-star support at 4362.50-4363.50
- Yesterday’s settlement will align to create our Pivot and point of balance in each.
- Contained action below first key resistance at 4403.25-4406 in the S&P and 13,819-13,854 in the NQ will leave the sellers in control throughout the session.
- A move through such first resistance would encourage a consolidation session, with major three-star resistance just above.
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NQ (June)
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Crude Oil (June)
Yesterday’s close: Settled at 103.79, up 1.60
- Concerns over ongoing China lockdowns, noted above, has weighed on Crude Oil through the session. U.S. Dollar +2.4% against Yuan.
- Ongoing geopolitics are buoying further weakness as Russia sets aims at southern Ukraine.
- EU could impose ban on Russian Oil as early as next week.
- Broad weakness across equities, especially in the material sector, signal indiscriminate selling, exhaustion, and near-term concerns over China.
- Pivot and point of balance has been critical, as market hugs wide range, remains that from yesterday at 102.86-103.44. Yesterday managed to settle above here in a constructive manner.
- Major three-star resistance at 105.23-105.64 held like a charm yesterday.
- We have reduced support to minor levels, our major focus to lean on remains two waves of major three-star support at 100.59-100.90 and just below at 99.88-100.15
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Gold (June) / Silver (May)
Gold, yesterday’s close: Settled at 1948.2, down 7.4
Silver, yesterday’s close: Settled at 24.621, down 0.65
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Silver (May)
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