MNI US OPEN - US GDP Data the Main Highlight

NEWS

MNI US EARNINGS SCHEDULE - Amazon, Intel Headline Busy Tech Earnings Day

MNI BoJ Preview - April 2023: No Change, But a Possible Assessment Of Longer Term Settings

We lean heavily towards the consensus no change view when it comes to the BoJ’s major policy parameters at the end of Governor Ueda’s first meeting atop the central bank. This is owing to the relatively short period of time that has elapsed since Ueda took up his new post, existing BoJ forward guidance, the underlying BoJ view on inflation and continued jitters surrounding the U.S. banking sector. There may be a tweak to the forward guidance, removing the reference to COVID-19, but that shouldn’t be viewed as substantial, if it is indeed forthcoming.

US (MNI): Passage of Debt Limit Bill in House Could Push Biden to Negotiating Table

The passage of a bill intended to lift the US debt ceiling and avoid a catastrophic default does little to resolve the issue in the short term but could push the White House towards the negotiating table with House Republicans. Speaker Kevin McCarthy (R-CA) secured a narrow 217-215 passage of the legislation which now passes onto the Senate. Senate majority leader Chuck Schumer (D-NY) has already declared the bill 'dead on arrival' given the demands it lays out for strict spending restrictions.

US (BBG): DeSantis May Enter Presidential Race as Soon as Mid-May: NBC

Florida Governor Ron DeSantis is ready to to enter the presidential race as soon as mid-May, NBC reports, citing four Republican operatives familiar with the conversations. One person said DeSantis would create an exploratory committee first, with an official launch soon after

US (WaPo): DeSantis Speaks in Israel Amid Political Turmoil

As a congressman, Ron DeSantis traveled here to scout U.S. Embassy sites, encouraging President Donald Trump to buck diplomatic tradition and recognize the contested holy city as the capital of Israel. As Florida governor, he visited an Israeli settlement in the occupied West Bank — a largely Palestinian territory he calls "disputed" — and noted his campaign promise to be the "most pro-Israel governor in the country."

US (BBG): US Saw Construction at Possible China Military Site in UAE

US detected construction at a suspected Chinese military site in the United Arab Emirates in December, after UAE said it was halting the project due to US concerns, Washington Post reports, citing intelligence documents and unidentified people familiar.

US/CHINA (MNI): China Def Min - US 'Pushing Up Regional Tensions' in South China Sea

Wires carrying comments from the Chinese Defence Ministry regarding last night's "The US continues to strengthen its military deployment in the South China Sea, deliberately pushing up regional tensions, regional countries should remain [on] high alert to it." There has been some very slight signals of intent from both the US and China to cool tensions in recent days. US Treasury Secretary Janet Yellen in a speech talked down the prospect of economic decoupling from China, instead using the more measured 'de-risking' often used by European nations.

CHINA (BBG): China Turns Focus to Boosting Jobs as Youth Unemployment Soars

China is encouraging companies to boost hiring as the economic recovery gathers pace, underscoring persistent worries over the labor market and soaring unemployment among young people. The State Council, China’s cabinet, published a detailed plan Wednesday to promote employment. Measures include expanding recruitment within state-owned enterprises, as well as providing subsidies to employers that recruit new graduates and young people who are struggling to find work.

CHINA (MNI): China Lenders Record Lower Profits in Q1

China commercial banks' profits suffered in Q1 due to higher interest rates on loans, a surge in deposits and the slow recovery of financial markets, 21st Century Business Herald reported on Wednesday. According to the China Banking and Insurance Regulatory Commission, lenders made net CNY667.9 billion profit in Q1, rising 1.3% y/y, compared to 5.4% at the end of 2022.

RUSSIA (WaPo): Russia Can Fund War in Ukraine for Another Year Despite Sanctions, Leaked Document

U.S. intelligence holds that Russia will be able to fund the war in Ukraine for at least another year, even under the heavy and increasing weight of unprecedented sanctions, according to leaked U.S. military documents. The previously unreported documents provide a rare glimpse into Washington's understanding of the effectiveness of its own economic measures, and of the tenor of the response they have met in Russia.

AUSTRALIA (MNI): Migration Review to Highlight Reforms to Attract More Skilled Migrants

Following the RBA meeting in April, Governor Lowe said that the current rate of population growth had caught the central bank by surprise and could result in higher inflation, " the net effect of a sudden surge in population growth could be somewhat inflationary for a period." He noted that near-term population figures would need to be upgraded.

CORPORATE (BBG): Meta’s Digital Ad Rebound Fuels AI Investments, Stock Surge

Meta Platforms Inc.’s surprising digital advertising sales rebound is buying the company time to keep pouring money into speculative businesses like artificial intelligence and virtual reality. The owner of Facebook, Instagram and WhatsApp, which spent the last few months aggressively cutting costs, reported quarterly revenue and user growth that beat analysts’ estimates.

CORPORATE (BBG): Glencore Bolsters Aluminum Position in $1.1 Billion Deal

Glencore Plc will buy stakes in bauxite and alumina assets in Brazil from Norsk Hydro ASA and Vale SA, strengthening the commodity giant’s position in the global aluminum market. The company will buy 30% of the Alunorte alumina refinery from Hydro and acquire a 45% stake in bauxite producer Mineracao Rio do Norte from Vale and Hydro in a deal carrying an enterprise value of $1.1 billion, Glencore and Hydro said on Thursday. Hydro will buy 40% of MRN from Vale and immediately sell it on to Glencore, it said.

DATA

EUROZONE APR ECONOMIC CONFIDENCE 99.3 (FCST 99.9); MAR 99.2r (MNI)
EUROZONE APR CONSUMER CONFIDENCE -17.5 (=FLASH); MAR -19.1 (MNI)

ITALY APR CONSUMER CONFIDENCE 105.5 (MNI)
ITALY APR BUSINESS CONFIDENCE 110.5 (MNI)

SWEDEN DATA (MNI): Economic Sentiment Edges Down in April

• SWEDEN APR ECONOMIC TENDENCY SURVEY 87.3; MAR 88.4r

The Swedish Economic Tendency Indicator softened by 0.9 points to 87.3 in April, as business sentiment weakened across all but construction. Consumer confidence recorded a 1.3-point uptick to 65.1, as personal finance and Swedish economic expectations improved. This was the a fourth consecutive month of improvement, yet the indicator remains severely downtrodden, implying soft spending for the time being.

NEW ZEALAND DATA (MNI): ANZ Business Survey Shows Elevated But Moderating Inflation Pressures

ANZ business confidence in April was down only slightly from March at -43.8 from -43.4, but remains more optimistic than the trough in December. The activity outlook however rose to -7.6 from -8.5, the best result since October but still lackluster. The April results were fairly stable despite the unexpected 50bp RBNZ rate hike at the start of April. ANZ interprets the price data as moving as the RBNZ would have expected, moderating but still elevated. Thus another hike on May 24, in line with RBNZ forecasts, is possible.

FOREX: USD Index Sits at Midpoint of Week's Range Ahead of Key Data

• The USD Index is sticking to the midpoint of the week's range headed through to the NY crossover, as markets tread water ahead of a busy Friday session: both the BoJ decision and a large number of CPI and GDP releases from across the Eurozone are scheduled to round off the week.
• The JPY is the poorest performer on the day, helped by the recovery off yesterday's lows in USD/JPY at 133.01. The move has been aided by a pause in the pullback for equities, as the e-mini S&P bounces off yesterday's bearish close. The BoJ decision on Friday could be key for short-term sentiment. Consensus looks for no change due to the relatively short period of time that has elapsed since Ueda took up his new post as well as existing BoJ forward guidance, the underlying BoJ view on inflation and continued jitters surrounding the U.S. banking sector. There may be a tweak to the forward guidance, removing the reference to COVID-19, but that shouldn’t be viewed as substantial, if it is indeed forthcoming.
• NZD takes up the top spot on an intraday basis, putting NZD/USD through yesterday's high and within range of the 200-dma to the upside at 0.6161.
• Later today, US data takes focus, with advanced US GDP for Q1 the highlight, ahead of pending home sales and the Kansas City Manufacturing Index. ECB's Panetta is the sole speaker today, commenting on the future of the digital Euro jsut after the European close.

BONDS: Slightly On Back Foot With Key Data Ahead

Global core FI is on the back foot early Thursday, with Bunds underperforming ahead of a significant set of data points to end the week.

• The weaker tone has come against a backdrop of equities bouncing slightly from Wednesday's lows.
• Implied ECB hikes have ticked a little higher, but German short-end weakness (and bear flattening) has proved short-lived.
• Overall price action has been fairly limited, with key Euro CPI data awaited Friday, as well as month-end.
• Today's US data includes jobless claims, and the first read of Q1 GDP. Later, we get pending home sales and KC Fed manufacturing.
• Today also sees the last Treasury coupon auction before next week's quarterly refunding announcement, with $35B in 7Y Note for sale.

Latest levels:

• Jun US 10Y futures (TY) down 6.5/32 at 115-11 (L: 115-6.5 / H: 115-17.5)
• Jun Bund futures (RX) down 43 ticks at 134.56 (L: 134.19 / H: 134.87)
• Jun Gilt futures (G) down 27 ticks at 101.33 (L: 101.05 / H: 101.44)
• Italy / German 10-Yr spread 0.6bps wider at 188.1bps

EQUITIES: E-Mini S&P Breaches 50-Day EMA, Signaling Scope for Extension Lower

MNI US EARNINGS SCHEDULE - Amazon, Intel headline busy tech earnings day

The Eurostoxx 50 futures contract has pulled back from recent highs. A key short-term support at 4282.10 remains intact - for now. This is the 20-day EMA where a break is required to signal a short-term top and highlight potential for a deeper pullback - towards 4206.30, the 50-day EMA. Trend conditions remain bullish and attention is on the bull trigger at 4363.00, Apr 21 high. A break would open 4381.50, Jan 5 2022 high (cont). A strong sell-off in S&P E-minis this week has resulted in a break below both the 20- and 50-day EMAs. The break of the 50-day EMA strengthens short-term bearish conditions and signals scope for an extension lower, towards 4061.11 next and 4018.75, Fibonacci retracement points. On the upside, the 20-day EMA at 4120.83 marks initial resistance, a clear break above this EMA would ease bearish pressure.

• Japan's NIKKEI closed higher by 41.21 pts or +0.15% at 28457.68 and the TOPIX ended 8.61 pts higher or +0.43% at 2032.51.
• Elsewhere, in China the SHANGHAI closed higher by 21.784 pts or +0.67% at 3285.885 and the HANG SENG ended 83.01 pts higher or +0.42% at 19840.28.
• Across Europe, Germany's DAX trades higher by 18.49 pts or +0.12% at 15810.48, FTSE 100 higher by 2.88 pts or +0.04% at 7852.96, CAC 40 up 29.84 pts or +0.4% at 7494.06 and Euro Stoxx 50 up 8.38 pts or +0.19% at 4354.41.
• Dow Jones mini up 83 pts or +0.25% at 33509, S&P 500 mini up 19.5 pts or +0.48% at 4096.25, NASDAQ mini up 99.5 pts or +0.77% at 12992.5.

COMMODITIES: Strong Sell Off in WTI Futures Exposes Support at $73.98

The outlook in WTI futures remains bearish and Wednesday's strong sell-off reinforces the current theme. The move lower has exposed $73.98, a Fibonacci retracement point. A break would open $72.76, the Mar 30 low. On the upside, a key short-term resistance has been defined at $79.18, the Apr 24 high where a breach is required to ease bearish pressure. This would also highlight a potential reversal. Gold remains in consolidation mode. The broader trend condition remains bullish, however, the yellow metal has recently entered a short-term corrective cycle. Price has pierced support at $1988.2, the 20-day EMA, highlighting potential for a deeper retracement. This has opened $1949.7, Apr 3 low. Key short-term resistance has been defined at $2048.7, the Apr 5 high. A break would confirm a resumption of the uptrend.

• WTI Crude up $0.37 or +0.5% at $74.59
• Natural Gas up $0.01 or +0.26% at $2.312
• Gold spot up $9.29 or +0.47% at $1998.38
• Copper down $0.05 or -0.01% at $386.1
• Silver up $0.14 or +0.57% at $25.0206
• Platinum up $7.96 or +0.73% at $1098.78