Indices on Wall Street ended yesterday’s session in mixed sentiment. Equities showed volatility as traders analysed the latest US company results. However, an important factor was concerns over the continuation of the interest rate hike cycle, which rose after a higher-than-expected UK inflation reading. 

The S&P 500 ended trading 0.01% lower on the day. The Dow Jones lost 0.23% and the Russell 2000 small-cap index gained 0.22%. The Nasdaq index of technology companies gained 0.03%.

Tesla shares lost more than 5% after the close of yesterday’s session on Wall Street following the release of its quarterly results. Investors primarily disliked the company’s declining margins, which were triggered by a massive programme of vehicle price cuts. Revenue and earnings per share came in almost in line with analysts’ expectations.

Mixed sentiment was also shared by Asia-Pacific indices, with the Nikkei gaining 0.25%, the S&P/ASX 200 gaining 0.09%, the Kospi losing 0.61% and the Nifty 50 trading 0.14% lower.

European equity futures pointed to a lower opening for the Euro Stoxx 50 benchmark. 

Against the broad FX market, relative weakness is seen in the New Zealand dollar, which came under pressure from the country’s lower-than-expected inflation reading.  The Swiss franc is doing much better, being the strongest G10 currency at the moment. The EURUSD pair is trading in consolidation and shows no excessive deviation in either direction.

Among others, the following will present their quarterly results today: Phillip Morris, AT&T and American Express.

The main speakers today will be: <FED> Waller (on cryptocurrencies), Mester, Logan, Bowman.

Williams from the US Fed stated that inflation is still ‘too high’ and the Fed will have to lower it.

BoJ bankers are increasingly raising the idea of changing the infamous yield curve (YCC) settings later this year, but are likely to keep policy unchanged at next week’s meeting. It is believed that they are still waiting for more evidence of sustained wage growth.

The ECB’s Wick added that the European Central Bank may raise interest rates at its June and July meetings.

Australian business confidence falls sharply in Q1 to -4 (previously -1)

China leaves 1 and 5 year interest rates unchanged, as widely expected

Japanese exports in March +4.3% y/y (+2.6% expected) and imports +7.3% y/y (+11.4% expected)

Crude oil extends its dynamic downward movement and is currently losing close to 1% (both Brent and WTI). Yesterday’s EIA report showed that crude oil inventories fell by 4.58 mb – much more than expected. On the other hand, gasoline stocks data showed a surprising increase of 1.3 mb, while distillate stocks fell much less than expected.

The weak sentiment is also prolonged by gold, which slipped below $1995 per ounce.

Bitcoin has broken below the $29,000 barrier, putting heavy pressure on other cryptocurrencies. Most of the market is plunging at the moment.

Heatmap of volatility in the FX market at the moment. Source: xStation 5 

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