US/China Trade Deal Hopes Keep Oil & Equities Bid

Orbex Market Flash

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US Durable Goods In Focus

A data-light European morning on Tuesday saw the US Dollar continue to drift higher with the Index trading up to highs of 97.05. Looking ahead to today’s US Session, durable goods is the main US data point, expected to have ticked down to -1.2% in February from the prior month’s 0.3% reading.

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Growth Concerns Plague EUR

EUR remains under pressure today. EURUSD sales have seen the pair falling for six straight days now, heading back down towards the 2019 1.1176 lows.  Continued data weakness in the eurozone, as well as Brexit uncertainty, have skewed sentiment to the downside for the single currency. Looking ahead this week, traders will be waiting for the release of the ECB meeting minutes for further details around the bank’s outlook.

Brexit Uncertainty Blights GBP

In the UK, GBPUSD remains pressured by ongoing Brexit uncertainty. Following another failed round of indicative voting yesterday, May has called a special cabinet session today aimed at resolving the deadlock. As it stands, the UK is currently due to leave the EU on April 12th without a deal. GBPUSD continues to trade in the lower portion of the 1.33 – 1.30 range which has framed price action over the last few months.

Better Risk Sentiment on Trade Deal Hopes

Despite ongoing uncertainty around Brexit, optimism around the US/China trade talks continues to keep risk sentiment buoyant. Following a round of talks held in Beijing last week, delegates from both sides are due to meet in Washington this week as the talks continue. The pace of these talks is being welcomed by the market as a sign that a deal is likely to come in the near future. SPX500 has traded up to its highest levels since October last year, breaking above the 2860.11 resistance level.

Safe Havens Bid

Despite the better tone to risk assets so far today, Gold and JPY have both traded a little higher against the US Dollar. The USD has softened a little heading into the crossover. Gold prices are sitting at 1287.23 at time of writing, just above the 1280.58 level support. While USDJPY is down on the day price continues to move back toward the 111.76 resistance level that capped the advance in February.

Swiss CPI Rises

In Switzerland, CPI came in better than expected in March rising 0.7% year on year, versus an expected 0.5% increase. However, CHF remains lower against both EUR and USD on the day with USDCHF trading highs of .9999 as of writing.

RBA Keep Rates On Hold

AUDUSD is trading lower today following the RBA rate decision overnight. While the RBA kept rates on hold for a record 29th consecutive meeting, the bank did acknowledge continued weakness in growth and inflation. The market is now pricing in a rate cut by September this year leaving AUDUSD trading back towards the .7021 support which has underpinned price action this year.

Trade Deal Optimism Boosting Oil

Oil prices remained firm over the European morning with crude trading above the 61.89 level resistance. A combination of the ongoing OPEC production cuts, as well as optimism around a US/China trade deal, is helping keep sentiment buoyed. However, a rise in oil prices has not helped USDCAD today, trading around 1.3322 at time of writing.

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