Curve not flattening fast enough - Equities...>

FOREX: Curve not flattening fast enough

- Equities gave further clues that the bounce from March lows may have concluded

Thursday, as US markets sank as Italy's Coronavirus curve failed to flatten

further. The country reported its highest new infection rate in four days,

making plans to imminently re-open certain sectors of the economy look

potentially premature. The UK also confirmed that the national lockdown would

extend for a further three weeks, kicking back any expectations of partial

re-opening in the near-term.

- This kept the USD firm, boosting the USD index to the best levels since Apr09,

which puts an end to the downleg seen since early April. The risk-off sentiment

was most notable in EUR/JPY, which re-circled the early April lows as well as

the 2020 lows of 116.13. A fall through here opens multi-year lows printed in

2019 at 115.87.

- Focus Friday turns to Chinese GDP data for Q1, with China seen shrinking by

12% across Q1. Industrial production and retail sales figures are expected to

show similar declines. Fed's Bullard and ECB's Rehn are also due to speak.