It has been another busy day for trading in both Europe and North America and it looks like we could see quite a bit of action in Asia Pacific markets heading into the weekend. Stock markets on both sides of the pond tried to rally early on but were unable to hold on to their gains and drifted downward into the US close, sending downward momentum into today’s Asia Pacific trading. It was another busy day for earnings with Baidu selling off following its disappointment but oil refiners did really well relative to expectations. After the US close, Gilead continued the pharmaceutical and biotech sector’s big winning streak this quarter. We’re still awaiting Tesla Motors battery announcement and First Solar earnings so the alternative energy sector could attract attention today. The main action has been in currency and commodity markets today. Following yesterday’s big miss in US Q1 GDP and a totally noncommittal FOMC statement, traders have been looking for signs as to whether the Q1 slowdown was seasonal and transitory as the Fed suggested or the start of a more serious slowdown. The ability of the US economy to rebound in April could be a key factor in determining whether the Fed could start raising interest rates this summer or delay liftoff until later in the year. Today, US jobless claims came in a lot better than expected while Chicago PMI also showed improvement, both signs that like last year, the US economy could be staging a big spring rebound This boosted USD in early trading and sent gold plunging as it put the summer case back in play after being squashed by GDP a day earlier. As trading progressed, USD weakened relative to EUR but gold, JPY and resource currencies. EUR had a strong day, posting 1%+ gains against GBP, JPY and CAD and a 2%+ gain against AUD. This gain comes just ahead of a holiday Friday and more Greek negotiations set for over the holiday weekend. This action suggests that traders expect some progress to be made toward avoiding a Grexit. On the other hand, GBP remained relatively soft against other majors weighed down by uncertainly about the results of next Thursday’s election and the possibility of a hung Parliament. AUD and NZD continued to get hit really hard and underperformed other majors overnight caught between yesterday’s RBNZ meeting and next week’s RBA meeting. Yesterday’s RBNZ statement which hinted at a future interest rate cut started both dollars falling and then the USD rebound sent them on another downleg. Looking forward, both dollars could remain choppy through today’s manufacturing PMI and inflation reports with traders speculating on whether the RBA could deliver a widely expected 0.25% interest rate cut or not at its meeting on Tuesday morning (Monday evening in North America). Manufacturing reports are also due for China and Japan today, plus Japan’s monthly basket of key economic indicators including employment and inflation. So indices could be active in Hong Kong, Japan, and Australia plus copper, iron ore, JPY AUD and NZD on those announcements as well. Continental Europe is pretty much closed Friday but UK and North American markets could still be active on manufacturing PMI reports for the countries that are open particularly the UK and US, plus US construction and consumer sentiment data mid-morning in the US. Phew! And all this is but a prelude to next week’s potential fireworks with the news calendar headlined by the UK election, RBA meeting, US payrolls and the start of monthly China data. Corporate News Gilead Sciences $2.94 vs street $2.32, sales $7.59B vs street $6.89B, raises 2014 year sales guidance to $28.0-29.0B from $26.0-27.0B First Solar ($0.62) vs street ($0.29) sales $469M way under street $620M, strategic alliance with Caterpillar to develop solar panels for microgrid applications. Canadian Oil Sands $0.16 vs street $0.10 Western Union $0.39 vs street $0.38 Visa $0.63 vs street $0.62 Economic News Significant announcements released overnight include: Russia interest rate surprise 1.50% rate cut to 12.50%, a 1.00% cut to 13.00% had been widely expected Canada Feb GDP 2.1% vs street 1.9% vs previous 2.4% US Q1 Employment cost index 0.7% vs street 0.6% US jobless claims 262K vs street 290K US personal income 0.0% vs street 0.2% US personal spending 0.4% vs street 0.5% US core PCE inflation 1.3% vs street 1.4% US Chicago PMI 52.3 vs street 50.0 US natural gas 81 BCF vs street 86 BCF Germany retail sales 3.5% vs street 3.1% Germany unemployment change (8K) vs street (15K) Germany unemployment rate 6.4% as expected Eurozone unemployment rate 11.3% vs street 11.2% Eurozone consumer prices 0.0% as expected Eurozone core CPI 0.6% as expected Spain Q1 GDP 2.6% vs street 2.5% and previous 2.0% Norway unemployment rate 4.1% vs street 4.0% Italy unemployment rate 13.0% vs street 12.6% Greece retail sales (3.3%) vs street (2.6%) Upcoming significant announcements include: Manufacturing PMI Reports: 9:30 am AEST Australia previous 46.3 11:00 am AEST China street 50.0 11:00 am AEST China non-manufacturing previous 53.7 11:35 am AEST Japan previous 49.7 9:30 am BST UK street 54.6 9:30 am EDT Canada previous 48.9 9:45 am EDT US Markit street 54.2 10:00 am EDT US ISM street 52.0 Other significant announcements: 9:30 am AEST Japan unemployment rate street 3.5% 9:30 am AEST Japan consumer prices street 2.2% 11:30 am AEST Japan labour cash earnings street 0.4% 11:30 am AEST Japan real cash earnings previous (2.3%) 10:00 am AEST Australia house prices previous 1.4% over month 10:00 am AEST New Zealand QV house prices previous 7.7% 11:30 am AEST Australia Q1 producer prices previous 1.1% 4:30 pm AEST Australia commodity index previous (19.7%) 10:00 am EDT US construction spending street 0.5% 10:00 am EDT US UMichigan sentiment street 96.0 10:00 am EDT US UMichigan current previous 108.2 10:00 am EDT US UMichigan expectations previous 88.0 10:00 am EDT US UMichigan 1y inflation est previous 2.5% 1:00 pm EDT US Baker Hughes drill rigs previous 932
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