Original insights into market moving news

[PODCAST] US Open Rundown 28th April 2021

  • European bourses are mixed though positively biased and rangebound in an earnings-dominated morning ahead of large-cap US reports; ES +0.1%
  • Microsoft declined and Google shares surged after-hours/pre-market with both beating on top and bottom lines in their respective earnings
  • US President Biden plans to ask Congress to pay for the entirety of the USD 1.8tln in new spending; speech at circa 21:00EDT tonight
  • The USD has been supported by yields with the US curve steepening as debt is pressured across the board ahead of the FOMC and Biden's speech
  • Looking ahead, highlights include FOMC rate decision & Chair Powell press conference, ECB's Centeno & Lagarde
  • Earnings from Apple, Ford, Facebook, Boeing, Qualcomm, eBay


Canada confirmed its first death from a blood clot after receiving the AstraZeneca (AZN LN) COVID-19 vaccine, while Public Health Canada said that blood clots are serious and very rare. (Newswires)

US Trade Representative Tai discussed increasing COVID-19 production with Novavax (NVAX) executives and proposed waiver of WTO intellectual property rights. (Newswires)

Spanish Tourism Minister confirmed that Spain will allow UK holiday makers in June. (The Sun)

India's Maharashtra could extend lockdown restrictions for 15-days. (Newswires)


Asian equity markets traded tentatively following the flat performance of US peers as caution lingered ahead of the FOMC and amid a deluge of earnings. ASX 200 (+0.4%) and Nikkei 225 (+0.2%) were kept afloat owing to their softer currencies although the upside was contained by weakness in Australia’s miners following a pullback in commodity prices and with the tech sector hindered after weakness in US peers, as well as the mixed fortunes of industry heavyweights post-earnings in which Microsoft declined and Google shares surged after-hours despite both beating on top and bottom lines. Meanwhile, stronger than expected Japanese retail sales and earnings releases have supported the risk appetite in Tokyo with Fuji Electric and Osaka Gas among the biggest gainers after both reported a jump in FY net. Hang Seng (+0.5%) and Shanghai Comp. (+0.4%) were choppy as focus also centred on corporate results with Chinese participants bracing for an influx of releases that involve over a thousand earnings updates set for today. Finally, 10yr JGBs were lower on spillover selling from USTs which were pressured after a mixed 7-year auction and due to corporate supply in US, while firmer results at the 2yr JGB auction also failed to spur prices and Australian 10yr yields were choppy with early gains wiped out following soft inflation data.

PBoC injected CNY 10bln via 7-day reverse repos with the rate at 2.20% for a net neutral daily position. (Newswires) PBoC set USD/CNY mid-point at 6.4853 vs exp. 6.4834 (prev. 6.4924)

Asian Development Bank upgraded forecast for 2021 Developing Asia economic output growth to 7.3% from 6.8%, upgraded China 2021 GDP forecast to 8.1% from 7.7% and upgraded India 2021 GDP forecast to 11.0% from 8.0%. (Newswires)

Japanese government is said to consider raising subsidies for stores forced to close due to the COVID-19 state of emergency, while reports later stated that the government is to tap JPY 500bln of reserve funds to support businesses hit by coronavirus curbs. (Newswires/Nikkei)

  • Japanese Retail Sales (Mar) M/M 1.2% vs. Exp. 0.6% (Prev. 3.1%)
  • Japanese Retail Sales (Mar) Y/Y 5.2% vs. Exp. 4.7% (Prev. -1.5%)


US President Biden plans to ask Congress to pay for the entirety of the USD 1.8tln in new spending and it was also reported that top White House officials have quietly been meeting with Republican Senators who drafted the counterproposal to President Biden's infrastructure plan, according to multiple sources. Furthermore, President Biden and his economic team are reportedly planning to refrain from increasing the estate tax in the upcoming tax-hike proposals as the proposed capital gains tax increase was already viewed as dramatic enough and Democrats are said to be among those that have doubts regarding US President Biden's plans to tax the rich with lawmakers in affluent districts set to oppose the plans as the party has built up a wealthy support base. (Newswires/Axios/FT)

US President Biden calls on Congress to eliminate carried-interest loophole and plans a range of tax hikes on the rich to fund spending, proposal involves a peak income tax rate of 39.6% and suggests that the tax break for real estate exchanges to be phased out. Includes USD 1trl in new spending over 10-years and USD 800bln in tax cuts. (WSJ/Axios)

US Treasury Secretary Yellen spoke with officials from the UK, Australia and New Zealand in which they reviewed the economic reaction to the pandemic and each country's medium-term fiscal strategies to facilitate a robust and long-term rebound. (Newswires)


  • UK BRC Shop Price Index (Apr) Y/Y -1.3% (Prev. -2.4%)


US Secretary of State Blinken said US and Russia are discussing the scheduling of the Biden-Putin meeting and other reports stated that President Biden is to hold direct conversations with Russia regarding Moscow's retaliation to sanctions. (Newswires/Sputnik)

Russian Foreign Minister says the West is delusional that Russia has retreated following the end of military exercises, AJ Breaking; additionally, says a war in the Donbass region is possible, but must be avoided, Sky News Arabia. (Twitter)

US and Israeli officials discussed serious concern regarding the Iranian nuclear program and agreed to set up a working group to focus on increasing threat from Iranian drones and precision guided missiles, while the White House said Iran nuclear envoy Malley is on his way to the region for additional talks. (Newswires)

Saudi Crown Prince MBS said the US is a strategic partner and that the kingdom is in agreement with the Biden administration on 90% of matters. MBS added that Saudi does not accept any pressure or interference with its internal affairs, while he added that Iran is a neighbour and that they want good relations with Iran but noted the problem is Iran's negative behaviour and that they are working with regional and global countries for solutions. (Newswires)

Saudi Arabia air defences intercepted and destroyed a drone launched towards the kingdom and Yemen's Houthis stated they launched a drone attack on a military base in southern Saudi Arabia. (Newswires)


European cash bourses trade mixed (Euro Stoxx 50 +0.4%) as most of the region gave up the modest gains seen at the cash open, albeit the breadth of price action remains narrow. Fresh fundamental catalysts have been light once again in the run-up to the FOMC policy announcement later today and President Biden's speech to Congress, until then earnings are poised to hold the spotlight barring any major headlines. US equity futures are also lacklustre with the NQ initially the laggard as the US 10yr yield briefly eclipsed 1.65%, although, at the time of writing, the downside in the ES is slightly less pronounced vs the YM, NQ and RTY. Back to Europe, some of the cash majors manage to hold narrow gains with the FTSE 100 (+0.2%), DAX 30 (+0.2%), and CAC 40 (+0.2%) experiencing some earnings-related impetus, with the Lloyds (+3.3%), Delivery Hero (+9.4%), Deutsche Bank (+9.0%) and Sanofi (+1.8%) all leading in their respective indices. Sectors are mixed but it's difficult to discern a particular risk tone or theme amid earnings. The banking sector remains a top performer in light of Deutsche Bank and Lloyds earnings and against the backdrop of a higher yield environment, in turn lifting some regional peers with BNP (+1.7%), SocGen (+1.6%), and Barclays (+1.6%) among the main beneficiaries. Other earnings-related movers include Sainsbury (-2.3%), Puma (-2.5%), Danske Bank (-2.4%), Assa Abloy (-4.0%), Sanofi (+1.9%), Covestro (-0.3%), and Saipem (-9.0%). State-side, Microsoft (-2.0% pre-mkt) and Google (+5.0% pre-mkt) trade mixed pre-market post-earnings, whilst Apple (-0.3% pre-mkt) saw a sources piece overnight via Nikkei suggesting the Co. is trimming planned AirPod production by 25-30% amid intensifying competition and lower demand.

Alphabet Inc (GOOGL) - Q1 2021 (USD): EPS 26.29 (exp. 15.70), Revenue 55.31bln (exp. 51.55bln). Announces 50bln share repurchase programme of class C stock. Google Segment: 51.18bln (exp. 51.10bln). Google Cloud: 4.05bln (exp. 4.05bln) Google Network Members Properties: 6.80bln (exp. 6.05bln). Google Other (Inc. Youtube Non-Advertising): 6.49bln (exp. 5.88bln). Other Bets: 198mln (exp. 174.32mln). (Newswires) Shares rose 5.0% in the pre-market

Advanced Micro Devices Inc (AMD) - Q1 2021 (USD): Adj. EPS 0.52 (exp. 0.44), Revenue 3.45bln (exp. 3.21bln). Computating And Graphics 2.10bln (exp. 1.85bln). Enterprise, Embedded And Semi-Custom 1.35bln (exp. 1.25bln). (Newswires) Shares rose 4.1% in the pre-market

Microsoft Corp (MSFT) - Q3 2021 (USD): EPS 2.03 (exp. 1.78/1.77 GAAP), Revenue 41.71bln (exp. 41.03bln). Intelligent Cloud: 15.12bln (exp. 14.86bln). More Personal Computing: 13.04bln (exp. 12.47bln). Productivity And Business Processes: 13.55bln (exp. 13.49bln). Operating Income 17.05bln (exp. 15.94bln). Capital Expenditure 5.09bln (exp. 4.72bln). (Newswires) Shares fell 2.1% in the pre-market

Please see the Daily European Equity Opening News and the headlines for the morning's European earnings


USD - The Dollar remains on a firm footing against the backdrop of more pronounced bear-steepening along the US Treasury curve ahead of the Fed and another keynote speech from President Biden on his American Families Plan amidst reports that he may ask Congress to foot the entire Usd 1.8 tn bill and issue an executive order to increase the minimum wage for federal contract workers to Usd 15/hour from Usd 10.95 at present. The fiscal, inflationary and funding/issuance implications are all overshadowing what was a decent 7 year note auction and dovish-leaning expectations for the upcoming FOMC. Hence, the DXY has reset after another dip below 91.000 to eclipse yesterday’s best within a 90.897-91.127 range in the run up to weekly mortgage applications, advance trade and wholesale inventories that are due for release before the Fed policy announcements, accompanying statement and post-meeting press conference from Chair Powell.

CHF/JPY - Diverging yield differentials continue to weigh on the Franc and Yen to the extent that an improvement in Swiss investor sentiment and firmer than forecast Japanese retail sales have not prevented Usd/Chf or Usd/Jpy from rebounding further from recent lows to 0.9180+ and 109.00+ respectively. However, the former has pared back towards 0.9150 and the latter pulled up just shy of a prior April high around 109.08 vs 109.10 on the 14th.

AUD/NZD - Mixed Aussie data overnight in the form of trade in comparison to preliminary jobs, earnings and retail sales, but softer than expected Q1 CPI alongside a retreat copper prices after a resolution to the Chilean port workers pension dispute has dragged Aud/Usd under 0.7750 to the relative benefit of the Kiwi via the Aud/Nzd cross back below 1.0750 and keeping Nzd/Usd anchored to 0.7200 awaiting NZ trade data.

GBP/EUR - Sterling is still straddling round numbers vs the Buck and Euro at 1.3900 and 0.8700 in the absence of anything Pound specific to trade off, bar less deflationary BRC UK shop prices, while the single currency remains rangebound against the Greenback between broad 1.2100-1.2050 parameters with key declining trendline resistance above the big figure coming in circa 1.2109 today and almost aligning 100 DMA/21 WMA supports providing a cushion during bouts of selling (currently at 1.2055 and 1.2053). Moreover, Eur/Usd is barricaded in big option expiries into the NY cut, stretching from 1.2000 (2.5 bn) to 1.2140-50 (1.5 bn) and totalling 8.8 bn – see 7.32BST post on the Headline Feed for details and a breakdown of size at various strikes.

CAD - The Loonie has Canadian retail sales to look forward to and potentially offer some independent inspiration before the FOMC, as Usd/Cad rotates either side of 1.2400 eying crude prices, overall risk sentiment and yields.

SCANDI/EM - Not much to glean from Norwegian or Swedish retail sales, while Riksbank’s Bremen basically read from the script after yesterday’s policy meeting that kept all settings steady and the optionality to lower the repo if required. Nevertheless, the Nok is back above 10.0000 vs the Eur and Sek closer to 10.1000 than 10.1500, as oil hovers near recent highs around Usd 63/brl and Usd 66.50/brl for WTI and Brent respectively. Elsewhere, somewhat mixed performances against the Usd as the Cnh strengthens from a firmer PBoC Cny fixing and Try extends its recovery mission, but Zar lags with further retracement in spot bullion, Mxn reverses through 20.0000 again and Rub suffers ongoing sanction and Ukraine-related jitters.

Notable FX Expiry, NY Cut:

  • EUR/USD: 1.1980-85 (1.8BLN), 1.2000 (2.5BLN), 1.2030-40 (1.1BLN), 1.2045-50 (450M), 1.2075-80 (1.2BLN), 1.2100-05 (1.4BLN), 1.2125-35 (1.1BLN), 1.2140-50 (1.5BLN) USD/CHF: 0.9050 (375M)
  • USD/JPY: 108.10-15 (1BLN)

RBNZ official Harris said unemployment remains relatively high and RBNZ is not meeting its employment objective, while Harris added that there is no need to remove monetary stimulus. (Newswires)

Australian Bureau of Statistics stated that Preliminary Trade Balance for March was at AUD 8.5B, Exports rose by 15% M/M and Imports rose 15% M/M, while it also released weekly payroll jobs and wages data for between the weeks ending 7th March and 10th April in which payroll jobs declined 1.8% and total wages paid fell 3.1%. (Newswires)

  • Australian CPI (Q1) Q/Q 0.6% vs. Exp. 0.9% (Prev. 0.9%)
  • Australian CPI (Q1) Y/Y 1.1% vs. Exp. 1.4% (Prev. 0.9%)
  • Australian RBA Trimmed Mean CPI (Q1) Q/Q 0.3% vs. Exp. 0.5% (Prev. 0.4%)
  • Australian RBA Trimmed Mean CPI (Q1) Y/Y 1.1% vs. Exp. 1.2% (Prev. 1.2%)


Debt futures continue to fall in advance of the Fed and perhaps more on defensive positioning ahead of President Biden’s speech on infrastructure spending amidst reports that he may lessen the burden on funding for the tax payer at the expense of Congress. However, another rather lukewarm reception afforded German issuance has hardly helped Bunds that have now been as low as 170.04 (-72 ticks) and up to nearly -20 bp in 10 year cash yield terms, while Gilts drew no comfort from a DMO linker sale that was covered 2.82 times as the previous sale saw bids exceed the offer by a 3.54 ratio. The UK benchmark hit a new Liffe low of 127.62 (-79 ticks) before bouncing and the T-note arrested declines just a fraction above Fib support at 128-25 that roughly coincides with 1.65%. Also ahead, several ECB speakers and US data alongside Canadian retail sales before EIA weekly inventories.


WTI and Brent front-month futures trade choppy within a relatively narrow band, with the former on either side of USD 63/bbl (62.67-63.30 range) whilst the latter meanders just under USD 66/bbl (65.54-66.22 range) at the time of writing. Fundamental newsflow has been light thus far although the geopolitical landscape remains heated amid reports overnight that the US Navy fired warning shots at Iranian boats in the northern Persian Gulf, in the vicinity of the Strait of Hormuz chokepoint. Further, Russia has returned to its punchy rhetoric as per Foreign Minister Lavrov's comments which stated that the West is delusional for thinking that Russia has retreated following the end of military exercises, and added that a war in the Donbass region is possible, but must be avoided. As a reminder, the OPEC+ meeting which was originally scheduled for today has been cancelled - the producers will stick to its quotas for now which sees some 600k BPD of oil back in the market from next month (350k BPD from OPEC+ and 250k BPD from Saudi's unilateral cuts). On the data front, yesterday's Private Inventory data so a larger-than-expected build (+4.3mln bbls vs exp. +0.7mln bbls), although Cushing and the products were more bullish. Participants will be eyeing the weekly DoEs as the next scheduled catalyst - with headline crude seen building 659k bbls. Elsewhere, spot gold and silver are pressured by the firmer Buck with the former sub-1,775/oz and the latter below USD 26/oz, albeit still within recent ranges. Turning to base metals, copper prices have been waning off highs following their recent run and after LME prices reached levels close to USD 10,000/t yesterday. The rise in prices has been attributed to a surge in demand from the EV front as more carmakers unveil plans to enter the market, whilst supply-side woes emanated from Chile whereby port and miners threatened strikes if the government blocked pensions bill. However, Chilean President Pinera said he will sign into law the opposition-led bill allowing the third drawdown from pensions - enabling people to make early withdrawals from their pension fund. Finally, Dalian iron ore prices retreated from peaks after rising to an all-time high with traders citing follow-through from US infrastructure plans coupled with robust China demand.

US Private Inventory Data (w/e April 23rd): Crude +4.3mln (exp. +0.7mln), Cushing +0.7mln (exp. +1.1mln), Gasoline -1.3mln (exp. +0.5mln), Distillates -2.4mln (exp. -0.6mln). (Newswires)

Chile President Pinera said he will sign into law the opposition-led bill allowing a third drawdown from pensions. (Newswires)

Saudi Arabia's Crown Prince MBS said they are currently in talks to sell 1% stake in Aramco to a major investor. (Newswires)

Goldman Sachs said it sees commodities rallying a further 13.5% over the next 6 months with oil to reach USD 80/bbl and copper rising to USD 11,000/ton with risks to the upside. Furthermore, it expects a record jump in oil demand of 5.2mln bpd increase over the next 6 months with demand to increase sharply by June and from the current 94.5mln bpd to 99.0mln bpd in Q3. (Newswires)

China will exempt export tax rebates for some steel products as of May 1st, according to the finance ministry; however, prior to this, China's Tariff Commission says China is to raise the export tariff of some steel products from 1st May and cut import tariffs . (Newswires)