Global growth downgrade hits sentiment

IMF downgrades 2019 growth forecast

In its latest World Economic Outlook report, the IMF trimmed its 2019 global growth forecast to 3.3% from 3.5% in its previous report in January. That would be the weakest growth rate in a decade and the most recent downgrade is the third in six months.

It was a mixed performance across equity markets, with some markets echoing the weak sentiment on Wall Street while others were immune. US index futures flitted between positive and negative in muted trading. On the currency front, the US dollar was generally better bid with the Australian dollar suffering the most. AUD/USD was down 0.16% by mid-morning while gold fell 0.2% but still held on to the 1,300 handle. It has been capped below the 55-day moving average since the end of March.

Gold Daily Chart

Source: OANDA fxTrade

Australia consumer confidence rebounds

There was a slight uptick in consumer confidence in Australia in April as the Westpac index rose 1.9% 100.7 following a 4.8% decline in March. The accompanying notes stated that the survey was conducted in the April 1-5 period and reflected positive reactions to the Federal budget. The Aussie could not benefit from the improvement however and traded heavy on the back of deteriorating risk appetite. AUD/USD has once again failed to push above the 100-day moving average at 0.7144. This average has capped prices on a closing basis since February 26.

AUD/USD Daily Chart

Source: OANDA fxTrade

Trump takes the trade war to Europe

In another of his tweets, US President Trump highlighted that the WTO found EU subsidies to Airbus have adversely impacted the US, to the tune of $11 billion. As a result he threatened to impose tariffs on $11 billion worth of EU goods.

What will the ECB say next?

It’s been a month since the ECB announced a re-introduction of its targeted loans measures to underpin a shrinking economy. Since then the economic data has tended to err to the downside so markets are on heightened watch for any hints of additional measures to come. Q1 GDP growth numbers for Europe will be released next Monday. Will the ECB have a sneak preview of the data?

NOTE: EUR1.12 billion worth of 1.1200 EUR puts expire tomorrow

The rest of the European data calendar includes February’s industrial and manufacturing production numbers for February along with trade data for the same month. The US session features CPI and the budget statement for March and a speech from Fed’s Quarles. The minutes of the last FOMC meeting will finish off the session

The full MarketPulse data calendar can be viewed at https://www.marketpulse.com/economic-events/

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