Original insights into market moving news

US Market Open: EUR leads and debt recedes after de Guindos; Powell, Lagarde & Bailey ahead

  • European bourses and US futures are bolstered, ES +0.8%, with currency dynamics lifting EZ bourses and after-market earnings assisting, TSLA +7%
  • DXY is pressured amid EUR advances following ECB’s de Guindos saying a July hike is possible, also sparked noted debt downside
  • More broadly, FX sees some divergence ahead of multiple Central Bank speakers and after various inflation releases
  • WTI and Brent are firmer, but off best levels, amid multiple Ukraine-Russia and China COVID developments, with the China restrictions seemingly set to remain
  • Russian Defence Ministry says it has captured Mariupol, while the Kremlin says talks are ongoing
  • Looking ahead, highlights include US IJC & Philadelphia Fed, EZ Consumer Confidence (Flash), Speeches from Fed's Powell, ECB's Lagarde, BoE's Bailey & Mann. Earnings from American Airlines, AT&T and Phillip Morris.

As of 11:15BST/06:15ET


  • US IJC & Philadelphia Fed, EZ Consumer Confidence (Flash), Speeches from Fed's Powell, ECB's Lagarde, BoE's Bailey & Mann. Earnings from American Airlines, AT&T and Phillip Morris.
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  • Swedish Riksdag is today to debate new security policy proposals, NATO will be among those, the date for the subsequent reports submissions has been brought forward from end-May to May 13th, via Aftonbladet.
  • Russia has declared persona non grata for employees of Latvian, Lithuanian, and Estonian consulates, which are to be closed in the country, via Reuters.


  • Russia has captured Mariupol, according to the Defence Ministry informing President Putin, via Reuters citing Ifx; still over 2k Ukrainian fighters in the Azovstal plant.
  • Russian President Putin has ordered a cancellation of plans to storm the industrial facilities in Mariupol, no need to storm the facility, via Reuters; has ordered that facilities will be blocked so that not even a fly could pass unnoticed.
  • Subsequently, Ukraine Deputy PM demands that Russia allows a humanitarian corridor for civilians in Azovstal.
  • UK PM Johnson said Russian President Putin made it clear that he wants to take more territory in Ukraine and could launch another assault on Kyiv, while he added the best way world leaders can respond is by continuing to arm Ukraine. UK PM Johnson reportedly compared Russian President Putin to a crocodile and said that a negotiated peace deal between Russia and Ukraine will be very hard, according to Reuters.


  • G7 Finance Ministers said they regret participation by Russia in international forums including G20, IMF and World Bank meetings this week, while they are strongly committed to not conducting government-to-government financial transactions with Russia, according to Reuters.
  • China's State Energy firms are said to be in discussions for Shell's (SHEL LN) Russian LNG stake, according to Bloomberg sources


  • The Russian tanker impounded by Greek authorities earlier this week is set to be released, according to a Reuters government source.



  • European bourses are firmer across the board, Euro Stoxx 50 +1.2%, upside that occurred alongside renewed EUR upside; potentially, on a stronger currency alleviating some imported-inflation pain.
  • However, the FTSE 100 -0.1% is the clear laggard in-spite of favourable GBP action with heavy-weight mining names pressured after Q1 production reports.
  • Stateside, US futures are firmer across the board, NQ +1.0%, following a strong TSLA, +7% pre-market, report and ahead of commentary from Fed's Powell at two events.
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  • Euro outperforms as dovish-leaning ECB member de Guindos tilts towards July hike and markets factor in 75 bps tightening before year end; EUR/USD hits 1.0936 high after breaching series of tech resistance levels and huge option expiries between 1.0900-05 (3.3 bln).
  • Dollar rattled by Euro exertions and DXY loses 100.000+ status in response.
  • Loonie and Kiwi diverge after mixed Canadian and NZ inflation data in relation to consensus, USD/CAD sub-1.2500 where 1.36bln expiry interest resides and NZD/USD sub-0.6800.
  • Yen back under pressure as yields rebound markedly and BoJ continues efforts to impose YCT, while keeping verbal currency intervention trained on the pace rather than scale of moves, USD/JPY above 128.00.
  • Pound undermined by EUR/GBP rally through technical resistance awaiting BoE rhetoric, while Yuan extends losses after latest weaker CNY fix and comments from Chinese media citing factors that may lead to further depreciation; Cable capped into 1.3100 and cross up over 21 and 50 DMAs to circa 0.8367.
  • Rouble rebounds as CBR says it is contemplating FX controls, USD/RUB just under 80.0000.
  • China Securities Times noted the Yuan has room to decline due to weaker exports, possible fund outflows from EM and faster rate increases by the Fed.
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Notable FX Expiries, NY Cut:

  • EUR/USD: 1.0700 (920M), 1.0725 (347M), 1.0790-00 (1.1BN), 1.0875 (363M), 1.0900-05 (3.3BN), 1.0925 (478M), 1.0950 (232M)
  • USD/CAD: 1.2500 (1.36BN), 1.2535 (230M), 1.2600-05 (290M), 1.2615-20 (315M), 1.2640-50 (745M)
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  • Bonds reverse course after latest correction from bear market territory, with Bunds, Gilts and 10 year T-note trying to stay on 154.00, 118.00 and 119-00 handles.
  • Eurozone debt hit by hawkish sounding remarks from usual ECB dove de Guindos to the effect that data may determine a July hike.
  • French OATs hold up better than the rest after strong multi-tranche auction, on balance and Macron's outperformance during Presidential TV debate.
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  • WTI and Brent are firmer but off best levels and currently reside around the mid-point of USD 2.50/bbl ranges amid multiple pertinent updates.
  • Namely, Russian-Ukraine negotiations and Mariupol developments, though we await Western confirmation, and China's COVID situation with strict curbs seemingly set to remain.
  • Brazilian Oil Minister discussed raising oil output with the US amid the Ukraine crisis, while Brazil is willing to meet India's oil needs and wants Indian investment. Furthermore, the oil minister hopes oil prices stabilise below USD 100/bbl and said a high oil price is not good for producers and consumers, according to Reuters.
  • Peru is to declare a state of emergency to restore copper output at the Cuajone mine which was halted by protests in late February, according to Reuters.
  • Spot gold has continued to slip below the USD 1950/oz mark losing the 21-DMA at USD 1947 ahead of potential 50-DMA support at USD 1936.05/oz.
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  • ECB's Wunsch says policy rates could turn positive this year, ready to consider a deposit rate hike in July. Would react to unwarranted market fragmentation, via Bloomberg
  • ECB's de Guindos says a rate hike is possible in July, will depend on data, via Bloomberg; no reason why APP cannot end in July, EZ inflation is close to peak, will slow in H2. Remarks which sparked a hawkish reaction in Euro-related assets
  • ECB's Lagarde reiterates monetary policy will depend on the incoming data and the evolving assessment of the outlook.
  • CBR's Nabiullina says we will consider cutting the Key Rate at upcoming meetings; Moscow Exchange functioning at almost-normal mode. Adds, they are looking at FX controls.


  • UK PM Johnson said he will fight the next election amid calls for him to step down due to the lockdown parties scandal and said he cannot think of any circumstances where he will resign, according to Reuters.
  • UK Minister for Brexit Opportunities and Government Efficiency Rees-Mogg warned that the UK government is prepared to take unilateral action if the EU does not reform the Northern Ireland protocol, according to FT.
  • French President Macron was viewed as more convincing in the TV debate by 59% of those surveyed, according to a BFM poll.
  • ECB's Wunsch says policy rates could turn positive this year, ready to consider a deposit rate hike in July. Would react to unwarranted market fragmentation, via Bloomberg


  • EZ CPI Final YY (Mar) 7.4% vs. Exp. 7.5% (Prev. 7.5%); MM (Mar) 2.4% vs. Exp. 2.5% (Prev. 0.9%)
  • Ex-Food & Energy Final YY (Mar) 3.2% vs. Exp. 3.2% (Prev. 3.2%); Ex-Food, Energy, Alcohol & Tobacco Final YY (Mar) 2.9% vs. Exp. 3.0% (Prev. 3.0%)


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  • Bitcoin is firmer on the session but seemingly remains drawn to the USD 42k mark, in-spite of a brief foray above the figure.



  • APAC stocks followed suit to the mixed performance on Wall St amid a lack of fresh macro drivers and with focus turning to earnings season and quarterly activity updates.
  • ASX 200 traded higher but with upside limited by losses in tech following underperformance in the Nasdaq, while miners were also subdued after BHP reported flat quarterly iron ore production and lower petroleum output.
  • Nikkei 225 outperformed amid the BoJ's consecutive efforts to cap yields and with Japan's government preparing relief measures.
  • Hang Seng and Shanghai Comp were lacklustre as big tech suffered in Hong Kong and with sentiment dampened by COVID lockdowns, while attention was also on CNOOC's A-shares which surged as much as 44% in its Shanghai debut before being halted.


  • PBoC injected CNY 10bln via 7-day reverse repos with the rate at 2.10% for a net neutral daily position.
  • PBoC set USD/CNY mid-point at 6.4098 vs exp. 6.4134 (prev. 6.3996)
  • Chinese President Xi said the global economic recovery is still weak and that they should guard against spillover effects from policy shifts in some countries. Xi said countries should abandon a Cold War mentality and avoid confrontation, while he opposes one-sided sanctions and long-arm jurisdiction. Xi added that decoupling, cutting off supply and pressure tactics by any country will not work, according to Reuters.
  • Nomura lowered its China 2022 GDP growth forecast to 3.9% from 4.3%, according to Bloomberg.
  • Japan's ruling coalition parties are set to agree on compiling a fresh extra budget to fund relief measures, according to Kyodo; subsequently, Japan LDP official says PM Kishida said he'll order an extra budget compilation, details may be unveiled on Tuesday.
  • Japanese Finance Minister Suzuki says he explained to the G7 the recent and rather rapid moves in JPY. Added that rapid FX moves are undesirable and FX stability is important.
  • China's Commerce Ministry expects consumption to continue to recover, to roll out targeted measures to increase consumption, via Reuters.


  • New Zealand CPI QQ (Q1) 1.8% vs. Exp. 2.0% (Prev. 1.4%); YY (Q1) 6.9% vs. Exp. 7.1% (Prev. 5.9%)
  • RBNZ Sectoral Factor Model Inflation Index YY (Q1) 4.2% (Prev. 3.2%, Rev 3.8%)