This is what you need to know to trade today Wednesday April 20:
The global bond sell-off continued on Tuesday with the 10-year US Treasury yield rising to its highest level since late 2018, near 3%. However, after posting its highest daily close in nearly two years at 101.00, the US Dollar Index (DXY) turned south during Asian trading hours on Wednesday. The European economic calendar will include the Industrial Production and Trade Balance data for February. Later in the day, Canada’s March Inflation Report, US Existing Home Sales data and the Fed’s Beige Book will be reviewed for further momentum. Investors will also be watching for comments from Fed members.
Major US stock indices posted surprise gains on Tuesday as investors turned their attention to earnings figures. In the early European session on Wednesday, futures fell between 0.3% and 0.9%, pointing to a subdued mood in the market. The latest reports from the intelligence services of Ukraine they suggest that Russia is preparing to increase its military aggression in the east of the country in the coming days. On a positive note, Shanghai city authorities announced that the coronavirus situation had shown a downward trend in recent days, with two city districts achieving zero community-level infections.
Meanwhile, Atlanta Fed President Raphael Bostic has signaled that a 75 basis point rate hike is not on his radar. Reflecting the same sentiment, Chicago Fed President Charles Evans rejected the idea of ​​rate hikes of more than 50 basis points at upcoming meetings. However, the recent weakness observed in the DXY It looks more like a technical correction than the start of a downtrend, as the 10-year US Treasury yield is flat on the day near 2.95%.
The EUR/USD fluctuated in a tight range on Tuesday as rising eurozone bond yields helped the shared currency remain resilient against rivals. The pair is posting modest daily gains above 1.0800 on Wednesday.
The GBP/USD closed the fourth consecutive trading day in negative territory on Tuesday, but managed to bounce back towards 1.3050 in European morning.
The USD/JPY hit its highest level in almost two decades above 129.00 during the Asian session on Wednesday before losing its traction and pulling back towards 128.50. The Bank of Japan (BOJ) announced that it will carry out an unlimited purchase operation of fixed-rate Japanese government bonds after yields opened near 0.25%, threatening the central bank’s upper limit.
The improved market mood yesterday and the rise in US yields made the Prayed suffered heavy losses. After falling almost 1.5% on Tuesday, XAU/USD continues to slide on Wednesday and was last seen losing 0.5% at $1,940.
Driven by risk flows, the Bitcoin gained 1.7% on Tuesday and advanced towards $42,000 before entering a consolidation phase near $41,500 on Wednesday. The ethereum managed to capitalize on Monday’s gains and hit a five-day high of $3,132 on Tuesday. At press time, ETH/USD is trading sideways around $3,100.
Source: Fx Street
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