Market View; World Stock Indexes; Trading Journal

The weakness of the dollar has led to an appreciation of Asian currencies, which removes some competitiveness to Asian companies, especially the Japanese. The Yen has been one of the currencies that most have appreciated against the dollar and Japanese exports are one of the most exposed to the US economy.

Today will start in Cernobbio (Italy), the Ambrosetti Forum, an annual event that brings together diverse personalities of the financial and business world, as the ECB Yves Mersch member, the Italian Minister of Finance Carlo Padoan, the CEO of Unicredit, among others. This type of event is always a chance to probe the feelings and perspectives of some of the main global economic actors.

Oil recorded significant gains explained by data indicating that production in the US is falling at an increasing rate and that in April the Russian production could be temporarily reduced. To this adds the cuts in Nigeria because of explosion that hit a pipeline in March and the approaching meeting of oil producers (17) in order to freeze the production.

I looks like April is the Feast of Trumpets month for the pair Eur/Usd. :-)

Retail sales and the Fed’s Beige Book will help investors and economists to reply to two interconnected issues. The first is the timing of the new rise in interest rates. The second is to know what was the pace of US economic growth during the 1st quarter. Despite the good data for March, many economists have reduced their estimates for this period.

During the last session, the euro tried to overcome the barrier of 1.14 but after a few unsuccessful attempts yesterday suffered a sharp correction. The decline of the euro was due more to technical reasons, to the extent that many operators had bought Euros and sold Dollars in recent weeks and faced with the inability of this currency pair overcoming 1.14 decided for some profit taking.

It starts today in Washington the joint meeting of the IMF and the World Bank, which will continue until Sunday. The main themes will be the state of the global economy and the situation of financial markets.

Besides the reaction to crude behavior after yesterday’s meeting of oil producers, investors will monitor the progress of the earnings season that shall gain this week higher intensity.

After the sharp decline at the end of last week, the European currency negotiate now up 1.13 against the dollar and is not to exclude a new test to the area of ​​1.14 in the coming days.

The appreciation of the European common currency was one of the under-performance factors of European equities against the US, as well as the poor performance of more cyclical sectors. To this contrast of factors added the fact that the main European indices are facing significant resistance zones (DAX 10400; CAC 4600/4633), with various technical indicators at extreme levels. The current situation of European indices deserves to be followed with caution.

The Earnings Season continues to be marked by the ease with which companies are overcoming, in terms of profits, analysts’ estimates. More important and more worrying is the fact that the companies that exceeded analysts’ estimates provide very cautious outlook for the future.

It was a pretty profitable Week!
The forum is a great help.
Which you all a nice weekend.

The Federal Reserve shall announce its latest monetary policy decision on Wednesday, in a week where Central banks shall have a dominant role.

As China toggles between structural reforms and Keynesian stimulus, there will be moments of calm between the storms. It seems we are in between storms.

The June meeting is being held on 14 and 15, a week before the referendum on the United Kingdom staying in the European Union. Although the outcome of this referendum is uncertain, there is a consensus in the case of the British opt for leaving the EU the effects, at least in the short term, the financial markets would result in an exceptional rise in volatility and uncertainty.

Asian indices closed with sharp falls, especially the Nikkei, because the Bank of Japan (BoJ) have not changed the general lines of monetary policy. In the market there was some expectation that the BoJ would reduce the reference rate (currently at -0.10%) or increase its quantitative easing program (currently in M.USD 720,000 / year). However, the BoJ did not alter the main lines of its policy. BoJ reduced the its projections for GDP and inflation.

An excellent trading day! The fall was inevitable.
Which you all a nice weekend.

Some critics say low rates are a mistake that could trigger an asset bubble or inflation.

Asian indexes closed mostly up, after the Reserve Bank of Australia has lowered key interest rates by 0.25% to 1.75%. This decision has overshadowed the fall of Caixin PMI index, which measures the manufacturing activity in China. In April, this index fell from 49.7 to 49.4, against the 49.9 estimated. Interestingly, the Shanghai stock market was among the best performers while the Hong Kong stock market closed with losses of more than 1%. The Japanese market was closed, having started the Golden Week. Apart from today (Constitution Day), in the next two days will be celebrated two holidays: the Environment Day and Children’s Day.

In addition to the negative effect on the Nikkei and the Japanese export sector, it is important to note that the Yen is considered an haven asset and its assessment could mean that the forex market is to consider some risks that are not immediately obvious.