Details Cookies
Important margin product information
CFDs and forex spot transactions are complex instruments and come with a high risk of losing money rapidly due to leverage. 74% of retail investor lose money when trading CFDs and/or forex spot with this provider. 0.56% of retail clients trading in leveraged products experience a negative account balance after a stop out occurred. You should consider whether you understand how CFDs, forex spot transactions or any of our other products work and whether you can afford to take high risk of losing your money.
Cookie policy

This website uses cookies to offer you a better browsing experience by enabling, optimising and analysing site operations, as well as to provide personalised ad content and allow you to connect to social media. By choosing “Accept all” you consent to the use of cookies and the related processing of personal data. Select “Manage consent” to manage your consent preferences. You can change your preferences or retract your consent at any time via the cookie policy page. Please view our cookie policy here and our privacy policy here

Global Market Quick Take: Europe – May 1, 2023 Global Market Quick Take: Europe – May 1, 2023 Global Market Quick Take: Europe – May 1, 2023

Global Market Quick Take: Europe – May 1, 2023

Macro 9 minutes to read
Saxo Strategy Team

Summary:  US equities celebrated the strong earnings season to date and the lack of surprises in the PCE inflation data on Friday and extended the rally into the weekly close as treasury yields pushed back lower. The week ahead features FOMC and ECB meetings and string of important US macro data, capped by the April jobs report on Friday. Will the Fed hike and signal that it is ready to pause for now as the market has firmly priced?

What is our trading focus?

US equities (US500.I and USNAS100.I): up against key resistance.

A strong start to earnings season and benign inflation data on Friday helped US equities rally again Friday, with the Nasdaq 100 index, led by strong action in the megacaps after several reported last week, challenging the final range resistance above 13,300, while the S&P 500 similarly is bumping up against resistance in the 4,200 area. Investors are hopeful that the earnings season will continue to deliver positive news this week, while economic data is “just right” and will allow the Fed to signal a pause in its tightening cycle after a 25-basis point hike this week.

FX: JPY continued lower after dovish BoJ. USDJPY at pivotal level.

The JPY continued to weaken on Monday after a Bank of Japan surprised on the dovish side on guidance, with a long timeline for a policy review before making any significant policy shift. The sell-off has taken USDJPY to its 200-day moving average near 137.00, and the next focus is the pivot high just shy of 138.00, the high of 2023. The sharp sterling rally on Friday has GBPJPY threatening seven-year highs, while GBPUSD pulled to its highest level since last June. EURUSD is stuck around 1.1000 as traders eye both the FOMC and ECB meetings this week, with the Fed expected to hike 25 bps and signal a possible pause for now, while the ECB is seen likely to hike 25 basis points and signal that it is not yet done tightening for the cycle.

Crude oil reverts lower after finding resistance

Crude oil bounced on Friday following a week of heavy selling driven by global demand concerns, as seen through rapid declining refinery margins on gasoline and not least diesel. However, the bounce failed to take Brent back above resistance at $80.50 in Brent while WTI’s attempt above $76.75 has so far been short-lived. The COT report covering the week to April 25, showed how the April 2 OPEC+ production cut continued to reverberate across the crude oil market. Last week through the negative impact of short sellers chasing the gaps and OPEC related longs being forced out. The net long in WTI and Brent was cut to 400k lots, a four-week low. Weakness in diesel saw the gasoil net flip to a net short for the only the third time in seven years while the ULSD (HOc1) was cut 44% to a 27-month low.

Gold trades softer ahead of key interest rate decision

Gold prices traded lower overnight with most Asian markets closed while in the US investors awaited news of a bid for First Republic Bank. Wednesday’s FOMC meeting will be the key event of the week as policy makers are expected to raise interest rates again. What happens next could set the short-term direction for gold as the market seeks confirmation that rates indeed will start to come down from June and onwards. A 60 basis point reduction is priced in before yearend, down from 75 basis points last week and any further lowering of expectations may trigger a move towards the key $1955-60 support arear. Silver meanwhile holds above the key support at $24.50 area.

US Treasury yields (TLT:xnas, IEF:xnas, SHY:xnas) fell Friday on PCE inflation

US Treasury yields eased slightly lower at the front-end of the curve on Friday after an in-line March PCE inflation report failed to raise any eyebrows, while 10-year yields dropped back about 10 basis points in the latest choppy action in the middle of the range that has been established since mid-March as traders try to get a handle on the outlook for the US economy. Key event risks this week for the US as noted below, including Wednesday’s FOMC meeting.

What is going on?

VIX drops to lowest level since late 2021

The rally extension in US equities and sense that the Fed is set to reach its peak policy rate this week, followed by a slow glide path lower later this year, presumably on a soft landing for the economy, has implied volatilities in the options market dropping like a stone. The VIX dropped below 16 on Friday for the first time since November of 2021, the month that the Nasdaq 100 index peaked for the cycle above 16,750.

First Republic Bank set for takeover before today’s open

US regulators are considering bids from three large US banks at the weekend and into last night for a takeover of First Republic Bank’s operations. The troubled US lender First Republic Bank reported last week that it lost some 40% of its deposit base last quarter and it shares spiraling under four dollars/share on Friday after trading above 15 dollars at the start of last week and 115 dollars before the early March demise of Silicon Valley Bank. JP Morgans is one of the bidders, even as its size, with more than 10% of the US deposit base, should mean that it is not allowed to takeover any competitors.

Grain market weakness triggers investor exodus

The Bloomberg Commodity Grain index reached a nine-month low last week with broad weakness sending all the major grain and soybean contracts lower. Speculators responded to the continued weakness by cutting their net long to just 33k lots, the lowest since August 2020, and down from 819,000 last April when the Russian invasion of Ukraine triggered supply worries. Selling of 64.7k lots of corn flipped the net position to a net short while continued selling of CBOT wheat lifted the net short to a 113k lots, a fresh five-year high.

What are we watching next?

Tomorrow provides keys for ECB’s Thursday meeting.

Coming into this week the ECB is priced to hike 25-basis points on Thursday and the forward curve almost fully pricing two additional rate hikes through the September meeting this year. A couple of important data points are up tomorrow meeting that could help shape the size of the ECB hike as well as how much further tightening is flagged in the ECB’s guidance at its meeting on Thursday. Tomorrow, the ECB will release its quarterly survey of bank lending and we will also get the Eurozone April flash inflation figure is on tap after the German flash April CPI report on Friday came in slightly softer than expected. The market is looking for Eurozone to report core inflation of 5.6% YoY after 5.7% in March, which was also the cycle high.

Big week ahead for US as FOMC up Wednesday, jobs data Friday.

The Fed is expected to hike 25 basis points at the FOMC meeting on Wednesday, with the suspense for the market centering on how willing the Fed is to confirm market expectations that this will be the last rate hike for the cycle, or at least for now. Indeed, despite Fed pushback, the market continues to price that the economy will weaken sufficiently in the coming six months to see the Fed cutting rates as soon as September, with more than 50 basis points of easing priced through the December FOMC meeting. TThis week also brings the usual flurry of first-week-of-the-month US data, including the April ISM Manufacturing survey Monday and ISM Services survey Wednesday, with the April jobs report up on Friday.

Earnings to watch

  • Monday: Berkshire Hathaway, Stryker, Vertex Pharmaceuticals, NXP Semiconductors
  • Tuesday: Thomson Reuters, HSBC, BP, DBS Group, Geberit, Pfizer, AMD, Starbucks, Uber Technologies, Marathon Petroleum, Ford Motor
  • Wednesday: Barrick Gold, Orsted, Airbus, BNP Paribas, Deutsche Post, Enel, UniCredit, Lloyds Banking Group, Qualcomm, CVS Healthm Estee Lauder, MercadoLibre, Kraft Heinz
  • Thursday: National Australia Bank, Anheuser-Busch InBev, Shopify, Novo Nordisk, Maersk, Volkswagen, BMW, Infineon Technologies, Uniper, Rheinmetall, Zalando, Shell, ArcelorMittal, Equinor, Apple, ConocoPhillips, Booking, Regeneron Pharmaceuticals, Zoetis, Becton Dickinson, EOG Resources, Ferrari, Fortinet,
  • Friday: ANZ, Macquire Group, Enbridge, Canadian Natural Resources, Adidas, Intesa Sanpaolo, CaixaBank, Cigna Group

Economic calendar highlights for today (times GMT)

1400 – US April ISM manufacturing
2000 – US Crop Progress Corn, Soybeans and Cotton planting
2000 – US Winter Wheat Condition
2300 – South Korea Apr. CPI
0430 – Australia Cash Rate Target


The Saxo Bank Group entities each provide execution-only service and access to Analysis permitting a person to view and/or use content available on or via the website. This content is not intended to and does not change or expand on the execution-only service. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Rules of Engagement and (v) Notices applying to Saxo News & Research and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Bank Group by which access to Saxo News & Research is gained. Such content is therefore provided as no more than information. In particular no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Bank Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Bank Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on Saxo News & Research or as a result of the use of the Saxo News & Research. Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Bank Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. Saxo News & Research does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of our trading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication under relevant laws.

Please read our disclaimers:
Notification on Non-Independent Investment Research (
Full disclaimer (
Full disclaimer (

Saxo Bank (Schweiz) AG
Beethovenstrasse 33

Contact Saxo

Select region


All trading carries risk. Losses can exceed deposits on margin products. You should consider whether you understand how our products work and whether you can afford to take the high risk of losing your money. To help you understand the risks involved we have put together a general Risk Warning series of Key Information Documents (KIDs) highlighting the risks and rewards related to each product. The KIDs can be accessed within the trading platform. Please note that the full prospectus can be obtained free of charge from Saxo Bank (Switzerland) ltd. or the issuer.

This website can be accessed worldwide however the information on the website is related to Saxo Bank (Switzerland) Ltd. All clients will directly engage with Saxo Bank (Switzerland) Ltd. and all client agreements will be entered into with Saxo Bank (Switzerland) Ltd. and thus governed by Swiss Law.

The content of this website represents marketing material and has not been notified or submitted to any supervisory authority.

If you contact Saxo Bank (Switzerland) Ltd. or visit this website, you acknowledge and agree that any data that you transmit to Saxo Bank (Switzerland) Ltd., either through this website, by telephone or by any other means of communication (e.g. e-mail), may be collected or recorded and transferred to other Saxo Bank Group companies or third parties in Switzerland or abroad and may be stored or otherwise processed by them or Saxo Bank (Switzerland) Ltd. You release Saxo Bank (Switzerland) Ltd. from its obligations under Swiss banking and securities dealer secrecies and, to the extent permitted by law, data protection laws as well as other laws and obligations to protect privacy. Saxo Bank (Switzerland) Ltd. has implemented appropriate technical and organizational measures to protect data from unauthorized processing and disclosure and applies appropriate safeguards to guarantee adequate protection of such data.

Apple, iPad and iPhone are trademarks of Apple Inc., registered in the U.S. and other countries. App Store is a service mark of Apple Inc.