• Friday marked the end of April trading and it ended with solid gains, sending DE30 to the highest level since January 2022 and US indices to back to resistance zones. For DE30 it was the fourth straight green monthly candle meaning that each month of 2023 has been positive so far.
  • Monday trading has been subdued as trading is halted on most markets due to the Labour Day holiday. US indices are trading close to Friday’s session highs and JAP225 is adding around 0.5%.
  • The Chinese PMIs were released over the weekend and they both were below expectations. The services index slid from 58.2 to 56.4 points but more worryingly the manufacturing one dropped from 51.9 to as low as 49.2 points, just around 4 months after the China reopening. It suggests that while domestic demand picked up on reopening, the global manufacturing keeps struggling.
  • Adding to those concerns, the Australian PMI dropped from 49.1 to 48 points. However, manufacturing PMI in India expanded from 56.4 to 57.2 points in a rare showing of manufacturing strength.
  • Investors were reminded of the US banking issues last week when the First Republic Bank kept suffering deposit flight and eventually the regulator announced that the Bank would be sold. The idea was to sell the Bank over the weekend, however, the process continues as of the Monday morning.
  • The markets did not seem overly concerned though, using strong earnings reports from Microsoft and Meta to catapult stocks towards the 2023 highs.
  • FX markets are bit mixed as of today with AUD being the strongest and the JPY the weakest currency. The JPY could be under pressure after the BoJ did not change the course of monetary policy with the new chairman at the helm.
  • Crypto markets are sliding after strong gains in recent weeks while the majority of the commodity markets are down as well.
  • The calendar for today is mostly focused on the US releases with the ISM (4pm CET) the key release.
  • The week has a chance to be very eventful with the FOMC (Wednesday) and the NFP report (Friday) the main points on the calendar.

There’s a large divergence between the US500 that is at the resistance and AUDUSD just picking up off the support zone. The Fed meeting this week should clarify the picture for the markets.

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