Yesterday’s weak US GDP report and noncommittal FOMC statement left traders grasping for straws trying to figure out if winter weakness was due to seasonal or transitory short term factors as the Fed indicated, or the start of a bigger slowdown in the US. Because of this uncertainty, traders have started to really focus on April data for signs of whether we could see a big spring rebound like the one we had last year or not. Overnight, there was chatter in the overseas press that China may be picking up this month. Today, US jobless claims came much better than expected, providing the first evidence of a seasonal rebound. With the Fed now keeping its options open meeting to meeting, this news has sparked a big rebound in USD with gold taking the biggest hit on the news, losing over $10/oz in the space of a few minutes. In other currency action today, NZD has dropped off sharply after the RBNZ statement talked the dollar down again and more importantly left the door open to interest rate cuts if needed. Although the central bank has lots of room to cut after 4 hikes last year, this still came as a surprise to many traders. AUD dropped in sympathy and in fact has plunged even more on renewed speculation that the RBA may need to cut rates again as well and on broker chatter that the country could lose its AAA credit rating (one of the few countries left with one) if commodity prices remain low and economic conditions continue to deterioriate. EUR has been performing relatively well today heading into tomorrow’s May Day holiday weekend across the continent. It could be an active one with Greece negotiations in full swing. Some reports suggest the country appears to be looking for a tentative deal by Sunday with a number of key payments coming up. Even with the potential for news over the weekend, so far EUR remains well supported while European indices like the Dax and IBEX have stabilized and started to claw back some of yesterday’s big losses. This suggests that the street is expecting to see at least some progress and not a surprise Grexit. The UK is open tomorrow but we are now into the last week of the election campaign. Uncertainty over the result and the risk of a hung parliament appears to be dragging on indices with the FTSE up only slightly and GBP dropping back a bit. It has been another busy morning for earnings, particularly in the energy sector. Companies with refining operations have done really well, beating the street and outperforming straight producers. Fertilizer companies have come in below expectations and Potash cut guidance so that sector may come under pressure today. Even with the holiday in continental Europe tomorrow, there is still a lot of potentially market moving news on the way and the potential for trading action with manufacturing PMI reports for Asia Pacific and English speaking countries due over the next 24 hours starting with the US Chicago PMI report out shortly. Note that US and Canada employment reports are not out until next Friday. Corporate News ExxonMobil $1.17 vs street $0.82, revenue $67.6B vs street $53.6B Imperial Oil $0.50 vs street $0.35 ConocoPhillips ($0.18) vs street ($0.16) Phillips 66 $1.51 vs street $1.40 Suncor Energy $0.12 vs street $0.11 Methanex $0.23 vs street $0.50 Potash $0.44 vs street $0.50, guides next Q to $0.45-$0.55 below street $0.58, cuts 2015 year guidance to $1.765-$2.05 from $1.90-$2.20 Mosaic $0.70 vs street $0.75 Goldcorp $0.01 vs street $0.10 BCE $0.84 vs street $0.78 Baidu CNY 7.58 vs street CNY 7.42, sales CNY 12.73B below street CNY 12.92B Economic News Economic reports released overnight and this morning include: Japan interest rate and QE QE maintained at ¥80T in an 8-1 vote. Dissenter once again called for a taper back to ¥45T New Zealand interest rate 3.50% no change expected 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% 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%) BoJ Japan 2015 GDP forecast cut to 1.5-2.1% from 1.8-2.3% Japan industrial production (1.2%) vs street (3.4%) Japan housing starts 0.7% vs street (1.9%) Economic reports due later today include: 9:45 am EDT US Chicago PMI street 50.0 10:30 am EDT US natural gas street 86 BCF
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