The positive momentum from the US earnings season and US-Sino trade talks, together with decent Chinese economic releases have bolstered the risk friendly environment with equity markets continuing where they left off before Easter, in quiet holiday trading today.
The S & P closed above the key pyschological 2900 level last week after better than expected retail sales figures. This helped the greenback push higher above 97 on DXY and it looks like a descending assymetric triangle could be building on the weekly chart. The euro failed to push through 1.13 again after disappointing PMI data whilst GBP/USD closed below 1.30 for the first time since February on Thursday. USD/JPY traded in a tight range around 112 all week printing a weekly 'doji' candle near its recent highs and right on the 200-week Moving Average. This comes just as its volatility slipped to the lowest levels in almost 5 years.
It's interesting that there is much talk of 'green shoots' after the recent positive data releases out of China. Oil and copper prices are making new highs with cyclical equities outperforming. On the flip side gold, US Treasurys and the safe haven yen and swissie are struggling. We will have to wait and see if this positivity helps US data going forward and with it some repricing of the Fed.
Here's what to look out for on the data calendar across global markets this week:
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