Markets Report - 06 April 2023

A daily breakdown of the markets for the 6th April 2023, provided to you by Sterlex.

🇪🇺💶Germany’s Industrial Production (IP) rose 0.6% YoY in February versus -2.7% market forecasts and -1.6% previous readings. EUR/USD turned south on renewed USD strength in the second half of the day on Wednesday and erased all the gains it recorded on Tuesday. Early Thursday, the pair fluctuates in a narrow channel slightly above 1.0900. The monthly figures also came in firmer than 0.1% expected, to 2.0% versus 3.7% prior.

Today’s German data traces the previous day’s mostly upbeat figures for the European powerhouse, as well as for the old continent, and allow the Euro buyers to cheer the recently hawkish comments from the European Central Bank (ECB) officials. However, the broad risk-off mood and recession fears underpin the US Dollar’s demand and weigh on the shared currency.

🇬🇧💷The data from the UK showed that Halifax House Prices rose by 0.8% on a monthly basis in March, compared to maker expectation for a decrease of 0.3%. There are no signs that UK inflation has started softening, however, a fresh jump in oil prices is expected to put more burden on households. Bank of England (BoE) policymakers’ anticipation that United Kingdom inflation will start declining quickly looks vague. The GBP/USD pair attracts some dip-buying near the 1.2435 region on Thursday and for now, seems to have stalled this week's modest pullback from its highest level since June 2022. Spot prices climb nearly 50 pips from the daily low, albeit lacks follow-through and trade in neutral territory, around the 1.2465 zone during the early part of the European session.

🇺🇸 🏦St. Louis Federal Reserve President James Bullard will deliver a speech on the economy and monetary policy. The US economic docket will feature weekly Initial Jobless Claims and Challenger Job Cuts data. Bond markets in the US will close early ahead of the Easter holiday on Friday and the trading action is likely to turn subdued later in the day.

Despite disappointing macroeconomic data releases from the US, the negative shift witnessed in risk mood amid growing concerns over an economic slowdown helped the US Dollar stay resilient against its rivals. Meanwhile, the 10-year US Treasury bond yield stays in negative territory below 3.3%. Statistics Canada will release the March jobs report as well. In the early European session on Thursday, US stock index futures trade mixed. Markets stay relatively quiet early Thursday and the US Dollar Index moves up and down in a tight range below 102.00 following Wednesday's rebound.