April 1st Morning Update

The US$ up, oil prices slightly higher, equity markets are higher as well as US yields. The dollar extended a rebound ahead of Friday’s U.S. jobs number. Many feels that the Fed will use this report to decide if they will raise 50bps on May 5th. Putin signed an order setting a Friday deadline for buyers from “unfriendly” countries to pay for gas using Rubles or be cut off, a demand Western customers have rejected. At the time of this writing there was no sign of immediate interruption. Negotiations aimed at ending the war are set to resume by video link. Russia accuses Ukraine of attacking a fuel depot in the Russian city of Belgorod. In other news. Ford, GM to halt production at two Michigan plants due to parts shortage. Global factory activity slowed in March as Russia’s invasion of Ukraine tightened supply chain bottlenecks. In currency markets, China’s yuan extends losses after its worst month in nine. Japan hits North Korea with new sanctions over missile launch. South Africa’s rand struggled for momentum against a stronger dollar, as a lack of progress in Russia-Ukraine peace talks weighed on appetite for risky assets. In the trading currencies AUD is up 0.43%, NZD up 0.12%, $/CNY up 0.20%, $/THB +0.48%.

The Canadian dollar steadied against its U.S. counterpart on Thursday, with the currency holding onto its first-quarter gains as investors cheered Canada’s potential combination of increased government spending and interest rate hikes. Investors are banking the BOC will be hiking its interest rate in 50bps increment. Support holds at 1.2450 if breaks look or 1.2383 (Nov 2021), while resistance remains at 1.2553.

Euro zone inflation surged to 7.5% in March, hitting another record high with months still left before it is set to peak, making grim reading for the European Central Bank, which needs to reconcile sky-high prices with vanishing economic growth. While energy was the main culprit, inflation in food prices, services and durable goods all came in above the ECB’s 2% target. Support remains to 1.1025 with resistance at 1.1160.

EUR/GBP continued its move lower after breaking above .8500 a few days ago. ECB’s dilemma is taking a toll on the EURO which has been the catalyst for the selloff in EUR/GBP. Support level should be found at .8375 while resistance at .8475 area.

The British pound edged lower against the U.S. dollar on Friday and was on track for a weekly loss of around 0.5%, as optimism surrounding peace talks in Ukraine faded, while UK manufacturing growth hit a 13-month low. Support remains at 1.3090 with resistance set at 1.3175.