Global Market Quick Take: Europe – 30 April 2024

Global Market Quick Take: Europe – 30 April 2024

Macro 3 minutes to read
Saxo Be Invested
Saxo Strategy Team

Key points:

  • Equities: Positive sentiment continues. Strong Q1 results from Adidas and Samsung.
  • FX: Yen volatility surges on suspected intervention, second round likely
  • Commodities: Oil retreats on peace talks, copper jumps to fresh highs, gold is retreating
  • Fixed Income: Bond markets dismiss higher-than-anticipated QRA financing estimates.
  • Economic data: EZ GDP/CPI

The Saxo Quick Take is a short, distilled opinion on financial markets with references to key news and events.

Equities: Japanese equities are extending their momentum again today up 1.4% with European and US futures pointing slightly higher. China April PMI Manufacturing at 50.4 beats estimates of 50.3 suggesting the Chinese manufacturing sector is improving. Samsung Q1 result beats estimates on revenue and forecasts a positive second half on generative AI demand. Adidas Q1 results beat on all parameters as Samba demand fuels turnaround case. HSBC is also reporting strong earnings this morning while announcing a stronger-than-expected buyback programme on top the CEO surprisingly stepping down. Focus in the US session on earnings from Eli Lilly, McDonald’s, and Coca-Cola ahead of the US trading session, and later tonight after the close Q1 earnings from Amazon and AMD.

FX: Dollar resumed its ascent in the Asian session today after a volatile day in FX markets yesterday amid suspected attention in JPY. USDJPY has partially faded the move, and it is testing a break above 157, but risk of another round of intervention remains if MOF/BOJ want to push out speculators further while structural weakness for the yen remains. Back in 2022 as well, Japanese authorities intervened on two consecutive days. AUDUSD also pushed lower to drop below 0.6530 after being rejected at 0.6585 as Australia’s retail sales came in below expectations. Focus is also shifting to the FOMC meeting and the high bar for Chair Powell to surprise hawkish. NZDUSD ran into fibo retracement at 0.5980 and reversed all the way to 0.5940. EURUSD was mostly sideways despite higher inflation prints in Germany and Spain and focus turns to EZ GDP and inflation is due today. Momentum in GBPUSD continues, as it rose to 1.2560+ amid sustained equity momentum. To read more on our weekly FX views, go to this Weekly FX Chartbook.

Commodities: Crude oil prices continue to retreat amid signs of progress towards a ceasefire between Israel and Hamas reducing the geopolitical risk premium on crude oil. Brent Crude is trading around the 88.22/brl level this morning. It might lower some of the geopolitical premium, but focus still also on attacks on energy infrastructure in both Russia and Ukraine. Focus may shift to macro dynamics in the next few days with FOMC meeting due, and demand outlook will be key. Meanwhile, copper prices continued their ascent to reach fresh highs with Codelco, Chile’s state-owned miner, reporting a decline in quarterly output at its aging mines. Gold is sideways and focus is on whether Chair Powell makes a hawkish pivot. Gold is turning lower this morning trading around the 2,322 level as fears over Chinese currency devaluation and inflation are likely easing.

Fixed income: Higher energy costs have led to a rise in German annual inflation data. However, the European sovereign bond market has largely overlooked these figures, anticipating tomorrow's release of the Eurozone headline CPI figures. These are expected to remain steady at 2.4% for the first time this year, while the core CPI is projected to decrease from 2.9% in March to 2.6% in April. Italian BTPs have outperformed peers, with 10-year yields dropping to 3.86%. Meanwhile, German Bunds ended the day with yields down by 4 basis points at 2.53%. In the U.S., higher-than-anticipated QRA financing estimates for the second and third quarters did not significantly impact investor sentiment, with ten-year U.S. Treasury yields closing around 4.63% after dipping to 4.61% earlier. Attention is now turning to the forthcoming Treasury issuance plan, which is expected to reveal steady coupon issuance and an increase in T-bill issuance.

Macro: Japanese Retail Sales/Industrial Output (Mar), Chinese NBS PMIs (Apr), Chinese Caixin Manufacturing Final PMI (Apr), French Flash CPI (Apr), German Flash GDP (Q1), EZ Flash CPI (Apr)/Flash GDP (Q1), US Employment Wages (Q1), US Chicago PMI (Apr), New Zealand Jobs (Q1). Stryker, Amazon, AMD, Starbucks, Mondelez, Eli Lilly, Coca-Cola, McDonald’s HSBC, Eaton, Cameco, Mercedes-Benz Group, Volkswagen, Adidas, Banco Santander, PayPal, Super Micro Computer, 3M

Technical analysis highlights: S&P500 uptrend if close above 5,146, key support 4,953. Nasdaq 100 key resist at 17,808, support at 16,963. DAX  if closing above 18,192 uptrend, support 17,620. 
EURUSD correction could push higher to 1.0777, below 1.0670 downtrend. GBPUSD correction likely to be over and resume downtrend. USDJPY likely to be caught in wide range between Monday high and low. AUDJPY correction likely down to 100.50. USDCAD resuming uptrend with potential to 1.39, key strong support at 1.3618. AUDUSD rejected 0.6584 likely resuming downtrend, support at 0.6485. Copper upside potential to 490-500. Gold correction could unfold, if above 2,350 likely resuming uptrend. US 10-year T-yield correction likely, support at 4.47

Volatility: Volatility, measured by the VIX, continues its downward path and ended yesterday at $14.67 (-0.36 | -2.40%). Today is another busy day on the earnings front, with big names publishing their Q1 results. Volatility due to these earnings, is expected from companies like Amazon.com, Eli Lily, Coca-Cola, AMD, McDonald's, Starbucks, PayPal, Super Micro Computer, and others. The economic calendar itself is quiet today, contrary to tomorrow which will bring a slew of indicators that will move the markets. VIX futures moved only slightly overnight and are now at 15.150 (-0.020 | -0.12%). S&P 500 and Nasdaq 100 futures are at 5138.25 (-8.75 | -0.17%) and 17885.80 (-18.75 | -0.10%) respectively. Monday's top 10 traded stock options, in order: TSLA, NVDA, AAPL, SOFI, AMZN, INTC, META, AMD, GOOGL and PYPL.

In the news: China's slow April factory, services activity dents economic momentum (Reuters). Tesla's self-driving bid for China faces rivals racing ahead (Reuters). Microsoft to invest $1.7 bln in cloud, AI in Indonesia, CEO says (Reuters). HSBC chief executive Noel Quinn to step down after five years (FT). French economy grows faster than expected in first quarter (FT). Ericsson chief says overregulation ‘driving Europe to irrelevance’ (FT).

Macro events (all times are GMT): Germany Q1 GDP SA QoQ est. 0.1% vs -0.3% prior (08:00), Eurozone April preliminary core CPI MoM est. 0.6% vs 0.8% prior (09:00), Eurozone Q1 advance GDP SA QoQ est. 0.1% vs 0% prior (09:00), MNI Chicago April PMI est. 45.0 vs 41.4 prior (13:45), US Conference Board Consumer Confidence April est. 104.0 vs 104.7 prior (14:00)

Earnings events: Key focus is Amazon and AMD both reporting tonight after the close – read our earnings preview here. Eli Lilly, Coca-Cola, and McDonald’s will all report ahead of trading and thus impact today’s session.

  • Today: Stryker, Amazon, AMD, Starbucks, Mondelez, Eli Lilly, Coca-Cola, McDonald’s HSBC, Eaton, Cameco, Mercedes-Benz Group, Volkswagen, Adidas, Banco Santander, PayPal, Super Micro Computer
  • Wednesday: Qualcomm, Mastercard, Pfizer, ADP, Barrick Gold, Franco-Nevada, GSK, Estee Lauder, DoorDash, AIG, Kraft Heinz
  • Thursday: Novo Nordisk, Linde, Booking, Apple, Amgen, Shell, ConocoPhillips, Cigna, Regeneron Pharmaceuticals, National Australia Bank, Macquarie Group, Vestas, Mærsk, Ørsted, Genmab, Pandora, Universal Music, ING, ArcelorMittal, Coinbase, Fortinet, Block, Moderna, Cloudflare,
  • Friday: Novonesis, Danske Bank, Credit Agricole, Societe Generale, Intesa Sanpaolo, MercadoLibre, Monster Beverage
  • Weekend: Berkshire Hathaway

For all macro, earnings, and dividend events check Saxo’s calendar

Quarterly Outlook

01 /

  • Fixed Income Outlook: Bonds Hit Reset. A New Equilibrium Emerges

    Quarterly Outlook

    Fixed Income Outlook: Bonds Hit Reset. A New Equilibrium Emerges

    Althea Spinozzi

    Head of Fixed Income Strategy

  • Equity Outlook: Will lower rates lift all boats in equities?

    Quarterly Outlook

    Equity Outlook: Will lower rates lift all boats in equities?

    Peter Garnry

    Chief Investment Strategist

    After a period of historically high equity index concentration driven by the 'Magnificent Seven' sto...
  • FX Outlook: USD in limbo amid political and policy jitters

    Quarterly Outlook

    FX Outlook: USD in limbo amid political and policy jitters

    Charu Chanana

    Chief Investment Strategist

    As we enter the final quarter of 2024, currency markets are set for heightened turbulence due to US ...
  • Macro Outlook: The US rate cut cycle has begun

    Quarterly Outlook

    Macro Outlook: The US rate cut cycle has begun

    Peter Garnry

    Chief Investment Strategist

    The Fed started the US rate cut cycle in Q3 and in this macro outlook we will explore how the rate c...
  • Commodity Outlook: Gold and silver continue to shine bright

    Quarterly Outlook

    Commodity Outlook: Gold and silver continue to shine bright

    Ole Hansen

    Head of Commodity Strategy

  • FX: Risk-on currencies to surge against havens

    Quarterly Outlook

    FX: Risk-on currencies to surge against havens

    Charu Chanana

    Chief Investment Strategist

    Explore the outlook for USD, AUD, NZD, and EM carry trades as risk-on currencies are set to outperfo...
  • Equities: Are we blowing bubbles again

    Quarterly Outlook

    Equities: Are we blowing bubbles again

    Peter Garnry

    Chief Investment Strategist

    Explore key trends and opportunities in European equities and electrification theme as market dynami...
  • Macro: Sandcastle economics

    Quarterly Outlook

    Macro: Sandcastle economics

    Peter Garnry

    Chief Investment Strategist

    Explore the "two-lane economy," European equities, energy commodities, and the impact of US fiscal p...
  • Bonds: What to do until inflation stabilises

    Quarterly Outlook

    Bonds: What to do until inflation stabilises

    Althea Spinozzi

    Head of Fixed Income Strategy

    Discover strategies for managing bonds as US and European yields remain rangebound due to uncertain ...
  • Commodities: Energy and grains in focus as metals pause

    Quarterly Outlook

    Commodities: Energy and grains in focus as metals pause

    Ole Hansen

    Head of Commodity Strategy

    Energy and grains to shine as metals pause. Discover key trends and market drivers for commodities i...
Disclaimer

The Saxo 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 is not intended to and does not change or expand on this. 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 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 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 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 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 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 (https://www.home.saxo/legal/niird/notification)
- Full disclaimer (https://www.home.saxo/en-hk/legal/disclaimer/saxo-disclaimer)

None of the information contained here constitutes an offer to purchase or sell a financial instrument, or to make any investments. Saxo does not take into account your personal investment objectives or financial situation and makes no representation and assumes no liability as to the accuracy or completeness of the information nor for any loss arising from any investment made in reliance of this presentation. Any opinions made are subject to change and may be personal to the author. These may not necessarily reflect the opinion of Saxo or its affiliates.

Saxo Capital Markets HK Limited
19th Floor
Shanghai Commercial Bank Tower
12 Queen’s Road Central
Hong Kong

Contact Saxo

Select region

Hong Kong S.A.R
Hong Kong S.A.R

Saxo Capital Markets HK Limited (“Saxo”) is a company authorised and regulated by the Securities and Futures Commission of Hong Kong. Saxo holds a Type 1 Regulated Activity (Dealing in Securities); Type 2 Regulated Activity (Dealing in Futures Contract); Type 3 Regulated Activity (Leveraged Foreign Exchange Trading); Type 4 Regulated Activity (Advising on Securities) and Type 9 Regulated Activity (Asset Management) licenses (CE No. AVD061). Registered address: 19th Floor, Shanghai Commercial Bank Tower, 12 Queen’s Road Central, Hong Kong.

Trading in financial instruments carries various risks, and is not suitable for all investors. Please seek expert advice, and always ensure that you fully understand these risks before trading. Trading in leveraged products may result in your losses exceeding your initial deposits. Saxo does not provide financial advice, any information available on this website is ‘general’ in nature and for informational purposes only. Saxo does not take into account an individual’s needs, objectives or financial situation. Please click here to view the relevant risk disclosure statements.

The Saxo trading platform has received numerous awards and recognition. For details of these awards and information on awards visit www.home.saxo/en-hk/about-us/awards.

The information or the products and services referred to on this site may be accessed worldwide, however is only intended for distribution to and use by recipients located in countries where such use does not constitute a violation of applicable legislation or regulations. Products and services offered on this website are not directed at, or intended for distribution to or use by, any person or entity residing in the United States and Japan. Please click here to view our full disclaimer.

Apple, iPad and iPhone are trademarks of Apple Inc., registered in the US and other countries. AppStore is a service mark of Apple Inc. Android is a trademark of Google Inc.