Wakeup Call: Loads Of Important Data Today... Expect Massive Volatility

ADP Employment Change, 1st Quarter GDP (first estimate) and FOMC Rate Decision.

Overnight News Bullets

• SW Retail Sales MoM/YoY (Mar) out at 0.4%/3.9% vs. 0.3%/3.6% expected.
• SZ UBS Consumption Indicator (Mar) out at 2.289 vs. 2.312 prior.
• A streak of E-Z Bloomberg Retail PMI's a showing deterioration.
• US S&P/CaseShiller Composite-20 YoY (Feb) out at -12.7% vs. -12% expected.
• S&P/CaseShiller Home Price Index (Feb) out at 175.9 vs. 180.7 prior.
• US Consumer Confidence (Apr) out at 62.3 vs. 61.0 expected.
• US ABC Consumer Confidence out at -41 vs. -40 prior.
• NZ Building Permits MoM (Mar) out at -9.1% vs. -6.5% prior.
• UK GfK Consumer Confidence (Apr) out at -24 vs. -20 expected.
• JN Jobless Rate (Mar) out at 3.8% vs. 3.9% expected.
• JN Job-To-Applicant Ratio (Mar) out at 0.95 vs. 0.97 expected.
• JN Household Spending YoY (Mar) out at -1.6% vs. 0.5% expected.
• JN Industrial Production MoM/YoY (Mar P) out at -3.1%/-0.4% vs. -0.8%/2.0% expected.
• AU Private Sector Credit MoM/YoY (Mar) out at 0.8%/14.9% vs. 0.8%/15.2% expected.
• AU HIA New Home Sales MoM (Mar) out at -6.0% vs. -5.3% prior.
• NZ Business Confidence (Apr) out at -54.8 vs. -57.9 prior.
• JN BoJ Target Rate out at 0.50% (unchanged) as expected.
• JN Vehicle Production YoY (Mar) out at 2.3% vs. 9.0% prior.
• JN Housing Starts YoY (Mar) out at -15.6% vs. -6.7% expected.
• JN Construction Orders YoY (Mar) out at 6.4% vs. 18.4% prior.
• JN Small Business Confidence (Apr) out at 43.1 vs. 46.6 prior.

Markets

• FX: USD slightly stronger, but generally consolidation ahead of today's figures.
• EQ: All sessions slightly negative, with especially basis materials and energy stocks lower.
• FI: Especially Bunds were strong yesterday, helped by bad E-Z data. JGB's finally also showing some strength.
• FUT:  Crude 3 dollars down yesterday, but beware of DOE/API today. Precious metals weaker.

O/N Data Heat map:

Calendar

Today's Highlights:

This and Next Week's Highlights:

What's going on?

• General weakness in commodities and basic material producers, anticipating USD strength after the important data today. EURUSD strong support at 1.5342. If the cross goes that low on the data, we suggest to buy with a stop below 1.5340 offered.
• US GDP (1Q A) expected at 0.5%. We expect 0.0%. The Personal Consumption (1Q A) is expected at 0.7%, which would be dramatically down from the 2.3% in Q4.
• According to STIR Futures markets, there is a 20% chance of a no-change decision tonight. 80% for a 25 bps. rate cut. While a cut is most likely, a 'no-change' would be quite USD bullish despite eventually weak GDP data.
  

FX

Massive Volatility in USD

FX Trading Strategies

Equities

Buy Nordea AB (NDA:xome)

• We expect the European market to open flat or slightly positive. Government of Singapore Investment may add more bank assets to its $18 billion of investments in UBS and Citigroup as it chases stable returns over periods as long as 30 years. This is very good news for the banks who are desperate for fresh money. Currently only Royal Bank of Scotland and HBOS announced a capital increase, but there are rumors out that Barclays and Deutsche Bank could also give out new shares. Watch out for q1 figures of  Siemens, SAP, FMC, Sanofi-Aventis, Kaupthing, Time Warner, Procter&Gamble, Kraft and Kellogs.
• Trading Strategy: We are looking to buy Nordea (NDA:xome) in the entry range of 100-101 targeting 105. Keep a stop-loss below 98.50.

Equity Index Levels

Futures

Natural Gas: We like the constructive chart.

• Buy (ngm8) @ $10.16/10.46 area with a stop below $10.10, target $11.40 at first.
• We like the positive chart construction and also the fundamentals as Natural Gas has posted a few weeks draw and is below last year average. We will continue to watch it closely as we need some Weekly builts to prepare for the heating season. Also decoupling with Oil should narrow, we rise our forecast to $15.00 before year- end.

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