Daily Market Outlook, April 24, 2024

Munnelly’s Macro Minute…

“Tesla Short Squeeze On Expected Earnings Miss, Meta On Deck Later”

On Wednesday, Asian stock markets are experiencing widespread gains, following positive sentiment in global markets. This comes after data showed a slowdown in U.S. manufacturing activity for April, leading to speculation that the US Fed may consider lowering interest rates. Traders are also taking advantage of lower stock prices following recent sell-offs. Traders are now looking forward to upcoming economic data, such as the release of first-quarter U.S. GDP figures and the core personal-consumption expenditures (PCE) price index, which is closely watched by the Fed as a measure of inflation.

Today's German IFO survey for April will offer further insights into whether economic activity in the Eurozone's largest economy is rebounding. Yesterday's April PMI data revealed improvements in the composite indices for both Germany and the Eurozone overall. In Germany, the index surpassed the crucial 50 expansion threshold for the first time since June 2023, while the Eurozone reading marked the second consecutive reading above 50 and the highest since May 2023. Both indices indicated a continued decline in manufacturing activity alongside a pickup in services. Anticipations are that the IFO readings will also reflect an increase. It is projected that the current conditions index will have recorded a second consecutive rise, reaching its highest level in 2024, albeit still expected to fall below last year’s Q4 average. Meanwhile, the expectations reading is forecasted to have risen for the third consecutive month, hitting its highest level since last April. The trajectory of the Eurozone economy's recovery and its strength will be pivotal factors for European Central Bank policymakers as they deliberate on potential interest rate cuts in June and beyond.

Stateside, durable goods orders for March will offer insights into whether manufacturing activity is rebounding. Recent data have shown some indications of improvement, and today's expectations include a monthly increase in orders of 3.0%. However, it's worth noting that a significant portion of this rise will likely stem from a substantial increase in the volatile transport sector, particularly Boeing orders, with ex-transport orders expected to grow more modestly by 0.5%. Additionally, data on capital goods shipments within the release will influence expectations for tomorrow’s Q1 GDP release. Traders will also be on earnings report watch after a significant short squeeze developing overnight post the Tesla earnings report, this evening markets will hear from Meta parent of facebook.

Overnight Newswire Updates of Note

BoJ To Discuss Impact Of Yen's Rapid Slide At This Week's Policy Meeting
Australia’s Hot Inflation Suggests Higher-For-Longer Rates
New Zealand First-Quarter Imports Fall Amid Sluggish Economy
China Repeats Criticism Of US Taiwan Aid As Bill Passes Senate
Australian Dollar Extends Gains On Upbeat CPI Figures, Tepid US Dollar
USD/JPY Sticks To 34-Year High Near 154.90 As Intervention Risks Loom
Oil Prices Inch Up As Market Weighs US Stocks Decline, Mid East Conflict
Tesla Aims To Release Cheaper Cars By 2025 After Sales Miss
Visa Profit Surges 17% As Consumer Card Spending Climbs
Texas Instruments Gives Solid Forecast In Sign Of Comeback

(Sourced from Bloomberg, Reuters and other reliable financial news outlets)

FX Options Expiries For 10am New York Cut

(1BLN+ represent larger expiries, more magnetic when trading within daily ATR)

EUR/USD: 1.0600-10 (1.5BLN), 1.0650 (1.06BLN)
1.0685-90 (426M), 1.0700-10 (3.07BLN), 1.0715-25 (1.3BLN)
1.0730 (260M, 1.0750 (230M)
USD/JPY: 153.00 (452M), 153.50 (1.53BLN), 154.00-10 (1.24BLN)
154.15-25 (570M), 154.50 (232M), 155.00 (298M), 155.40 (1.05BLN)
156.00 (421M)
GBP/USD: 1.2450 (613M). EUR/GBP 0.8525 (342M), 0.8600 (351M)
USD/CHF: 0.8970 (320M), 0.9050 (335M), 0.9150 (765M)
0.9200 (320M)
AUD/USD: 0.6325 (500M), 0.6400 (472M), 0.6440-50 (356M)
0.6475-85 (287M), 0.6500-10 (359M), 0.6525 (335M)
0.6630 (348M)
USD/CAD: 1.3565-75 (1.35BLN), 1.3590-1.3605 (1.4BLN)
1.3650 (625M), 1.3680 (914M)
USD/ZAR: 18.8470 (1.0BLN), 19.40 (196M), 19.60. (303M)

CFTC Data As Of 19/04/24

Japanese yen net short position is -165,619 contracts
Swiss franc posts net short position of -36,212 contracts
British pound net long position is 8,619 contracts
Euro net long position is 12,224 contracts
Bitcoin net short position is -363 contracts
Equity fund managers cut S&P 500 CME net long position by 89,326 contracts to 850,042
Equity fund speculators trim S&P 500 CME net short position by 139,497 contracts to 193,791