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U.S earnings continued to have their say on Friday, pushing the major stock indices higher throughout the session. This time round Microsoft, American express and Ford all took the stage releasing their statements. Ford’s good report came much of a surprise, especially due to all the recent problems in the auto-industry. The stock posted a gain of over 11%.
While the major stock indices didn’t break any major levels throughout the session, they did close in green, closing the session with a gain of approximately 2%.
Positive momentum didn’t last Monday morning as the Asian markets opened in red on bad economic data. Japan’s government posted a gloomy outlook during early market hours stating that their economy had shrunk dramatically over the last year and that they expect to show no growth from the beginning of 2009. According to analysts, recent government aid of $159 billion is expected to slow the pace of its economic contraction, but not stop the economy from deteriorating entirely.
Despite the bad economic outlook in Asia, the U.S is starting to show signs of a mild turnaround. According to Bloomberg news recent data is showing that banks are easing up on their lending conditions. “The Libor-OIS premium that indicates banks’ reluctance to lend to each other fell to 0.87 percentage point on April 24, the lowest level since before Lehman Brothers Holdings Inc. collapsed in September”
On the Forex Front
The Dollar increased against its counter parts Monday morning as a combination of profit taking and pessimism hit the board. The majors are currently located at critical levels, whereas the major equity indices are located at resistance.
The USD/JPY continued its way down throughout the night, after breaking trend line support on Friday. Even though this pair seems to be forming a new short term down trend one must take into consideration that the current breakout happened as indicators were pointing towards an oversold scenario. Even though the RSI on the daily chart still has room to drop, the price pattern has now touched its lower Bollinger band, an area that could send this pair higher.
The GBP/USD also opened the session lower as the green back gained against an array of currency pairs. GDP results from the U.K showed that their economy is still fighting harsh deterioration, as the economy is contracting at a quarterly base. In addition, Alastair darling released comments last week regarding a new plan which involves tax hikes. One must note that with the economy in dire straits, the new plan wasn’t welcomed by U.K citizens. On the up side, retail sales picked up in the month of March, showing a better than expected result of 1.5%. Market Data to Watch Out For
Looking forward the economic calendar is relatively light on data today. The U.S is scheduled to release it Mid-West Manufacturing Activity and Japan will release its retails sales later on during the night. One should observe the U.S session for a further outlook
Market Pivot Points
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