Macro economics

Analytics on 22/04/2019. Muted trading on Easter Monday, oil at fresh November highs

It’s Easter Monday today and the European markets are still also closed. So, liquidity remains thin ahead of the North American trading later today. US stock index futures point to a lower open ahead of further earnings reports. In general, US markets could see a quiet trading session on Monday following the long Easter weekend. Dow futures indicated a drop of more than 50 points at the open.

Currencies are also muted at the start of the trading week. EURUSD is trading marginally higher but the pair still lacks the upside impetus after an aggressive sell-off on Thursday sent the prices to lows marginally above 1.12. The euro struggles to regain the bullish bias after failed attempts to confirm a break above the 1.13 barrier earlier last week. In absence of economic data and due to thin trading conditions amid Easter holidays, the pair will likely continue to oscillate not far from the current levels in the short term. The near term technical outlook remains bleak, with chances for a return above the key 1.13 barrier are low so far.

GBPUSD is trading in a muted manner as well. The pair has settled just below the 1.30 level, with Brexit pessimism caps the recovery attempts ahead of the British parliament’s re-open on April 23. The uncertainty around Brexit increased amid the reports that the opposition Labour party is promoting another Brexit referendum, while the senior conservative leader is set to tell the UK Prime Minister Theresa May to quite her position. In the short term, March month figures of the US Chicago Fed National activity index and existing home sales could bring some action into the pound and dollar pairs in general. However, a decisive break above the 1.30 level is unlikely in the short term.

USDJPY is still stuck within a range but is making some bullish attempts after two days of a decline. The pair struggles to overcome the 112.00 due to a low investor activity, with the 111.75 area remains the immediate support for the greenback. Meanwhile, on the upside, the pair needs to challenge the 112.15 area to register fresh 2019 highs. The key events for USDJPY this week are the bank of Japan’s meeting on Thursday and the US GDP report on Friday.

Oil prices rallied strongly on Monday, with Brent jumped more than 3% amid the reports that the US Secretary of State Mike Pompeo will announce that from May 2, the State Department will no longer grant sanctions waivers to any country that is currently importing Iranian crude. This increases concerns over the supply glut in the global market, in addition to OPEC+ efforts, supply disruptions in Libya and Nigeria, as well as the current US sanctions against Iran and Venezuela.

Against this backdrop, Brent rallied above the $73 figure for the first time since November and registered fresh highs at $73.65. A daily close above the $73 threshold will confirm the bulls’ readiness for further attacks in the short term, should the US confirm its plan on tightening sanctions against Iran.

Nathan Lambert, Head of Global FX Analytical Department

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Interest rates

Country Rate Value
USA Federal Funds 0,25 %
Switzerland 3 Month LIBOR Range -0.75 %
United Kingdom Repo Rate 0,10 %
EU Refinancing Tender 0,00 %
Japan Overnight Call Rate -0,10 %
New Zealand Official Cash Rate 0,25 %
Australia Cash Rate 0,25 %
Canada Overnight Rate Target 0,25 %
All rates
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