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Tarek Al-Wazir, economy minister for the German state of Hesse, where Frankfurt is situated, said that 18 banks have committed to Frankfurt since the Brexit vote. He said to the Press Association in London that "there will be other entities who are in the decision process now". And he emphasized that " if you compare everything that happened since the Brexit referendum and if you compare the real decisions made, I think we are number one on the continent and I'm sure this will continue."

Though, Al-Wazir expressed that he's "a little bit disappointed" as Paris was chosen as the new location of the London-based European Banking Authority. While Paris has its own competitive edges, Al-Wazir believed that "the ECB is far more relevant".

Hubertus Vath, managing director of city lobby group Frankfurt Main Finance noted that there are "100 institutions" which have to make decisions on locations post Brexit. And, just around 40 have announced that decisions already. There are still 60 "up for grabs" for EU cities.

Talking about the Boao Forum, there is one interesting point to note. On Sunday, head of the Institute of World Economics and Politics at the Chinese Academy of Social Sciences Zhang Yuyan said there is no intention of allowing trade dispute with the US to spill over to finance. Zhang emphasized that there should be a "firewall between trade problems and financial ones". And, the chance of China selling its massive US Treasury holdings due to a trade war is "very small".

Zhang added that "maybe one or two days before the actual implementation (of the tariffs), the US side will gain its reason and sense." And, "there are many cases of compromises being reached at the last minute."

STOCKS

Dow (23932.76, -2.34%) came off sharply on Friday after seeing a 2-day bounce from levels near 23500 previously. Overall the trade region is getting narrow for the next few sessions between 24300-23300 and the index would soon break on either side to move afresh for the medium term, giving more clarity to the medium term direction.

Dax (12241.27, -0.52%) is trading at immediate channel resistance as seen on the daily candles. While the resistance at 12300 holds, the index is likely to come off towards lower levels of 12000-11800 again in the coming sessions. A break above 12300, if seen would take the index to 12500 and maybe higher in the medium term. Watch price action at current levels.

Nikkei (21588.03, +0.10%) has resistance near 21800 on the 3-day candles and if that holds, it could push the index to 21000 or lower in the medium term. A sustained rise above 21800 if seen could indicate some bullishness but while the Dollar Yen looks bearish, a rise in Nikkei looks less likely.

Shanghai (3126.66, -0.14%) is also trading at crucial levels just now. Although the index has an immediate support near 3100 on the candle charts, the 3-day line chart shows that the price has broken below the immediate support and may look bearish for the coming sessions with a possible target of 3000.

Nifty (10331.60, +0.06%) has got some support near 10100 and may keep the index higher for now. A possible rise to 10400-10500 is expected in the next few sessions. Sensex (33626.97, +0.09%) will have to break above 34000 to indicate some medium term bullishness. While below 34000, there could be some chances that the price continues to trade sideways.

COMMODITIES

Brent (67.36) is likely to come down to 66 from where it may get some support to bounce back towards 69 again. While Nymex WTI (62.25) is testing support at current levels. If support at 62 holds on WTI, it could move up in the next few sessions to 64-65 again.

Gold (1336.70) continues to trade in the consolidation mode between 1360-1310 with a narrower range of 1350-1320 for the next 2-sessions. No clarity is direction is visible just now while the commodity price trades within the mentioned range.

Copper (3.0475) looks bearish towards 3.0-2.95 on the daily line chart. A fall back towards 3 or lower is expected in the near term.

FOREX

Dollar index (90.186) hasn’t been able to rise past Thursday’s high of 90.59. There is immediate resistance near 90.50-90.75 as seen on 3 day candles and daily line chart. While below this resistance, the Dollar Index could dip towards 89.5 (seen as support on weekly line chart).

Euro (1.2274) tested lower support on daily candles (near 1.2225) both on Thursday and Friday by dropping to lows near 1.2218-1.2215 and now seems to be bouncing from those levels. The 21 days moving average line is near 1.2319 and could provide some interim resistance in the day ahead. We have been saying that a break below 1.215 would imply medium term bearishness and a breach above 1.25-1.26 would imply medium term bullishness. While between these levels, Euro could continue its ranging of the past 2 months.

Dollar Yen (106.94) saw highs near 107.46 last week and is trading below 107 currently. There could be some support provided by earlier resistance trendline on daily candles and daily line chart near 106.8. If it stays above this level and then moves beyond its previous high of 107.9 (seen in Feb end), it could imply medium term bullishness for Dollar Yen.

Euro Yen (131.25) is trading around resistance in the downward channel on 3 day and weekly candles near 131.0-131.5. If it respects these resistances, it could come down towards support near 130. However, if the Euro moves up towards 1.232 this week and the Dollar Yen stays above 106.80, Euro Yen might well rise past this resistance.

Pound (1.4095) as per our expectation touched levels near 1.396 (very close to support on daily and 3 day candles) and now seems to be bouncing from there. Immediate upside target would be 1.42 (seen as resistance on daily and 3 day candles).

Dollar Rupee (64.97) has been ranged in the last week. We still hope to see dip below 64.90. The Indo-US Yield Spread might bounce and aid Rupee strength.

INTEREST RATES

US long term yields as per expectation are seeing a slight dip from resistances in respective downward channel. The US CPI data release this week (11th April) could be important for yields. We have been saying that US yields could continue moving in a downward channel through Apr-May.

US 10 Yr Yield (2.79%), 30 Yr (3.03%), 5 Yr (2.60%), 2 Yr (2.28%) :

The 10 Year almost tested resistance in the downward channel on short term chart by reaching levels near 2.83% but has subsequently dipped from there and could move lower towards earlier low near 2.74%.

The 30 yr yield as expected has also dipped after testing channel resistance near 3.07% and could dip towards 3% this week.

Chinese President Xi Jinping's speech at the Boao Forum for Asia on Tuesday will be a key focus this week. Xi has so far been quiet regarding the trade tensions with US President Donald Trump. There are expectations for Xi to make use of the occasion to push back and defend. Or, Xi could say something consistent with China's theme of blaming US for unilaterialism and protectionism,

However, Xi's leadership and communication style is clearly very different from Trump's. And it's, to us, unlikely for Xi to suddenly change his style to adopt a confrontational way like Trump. That is, the way that Trump tripled down on the tariff proposals to USD 150b immediately after Chinese response. Nor would Xi adopt a way like Trump, who could say "President Xi and I will always be friends" right after raising the threat to China. We've never heard Xi saying that Trump is his friend (haven you?). It's more likely for Xi to just reiterate the push for globalization, compliance with then WTO and its own commitment in opening up the markets. Xi, as self-envisaged emperor, will just let his officials do the barking.

Key Highlights

• The Euro formed a decent support above the 1.2200 level against the US Dollar.
• The EUR/USD pair attempted a close above a bearish trend line with resistance at 1.2270 on the 4-hours chart.
• The US Nonfarm Payrolls for March 2018 posted 103K, less than the forecast of 193K.
• Today, the German Trade Balance for Feb 2018 will be released, which is forecasted to post a trade surplus of €21.8B.

EURUSD Technical Analysis

After a major decline, the Euro found support above the 1.2200 level against the US Dollar. The EUR/USD pair started a recovery and moved above the 1.2240 resistance.

Looking at the 4-hours chart, it seems like the pair formed a decent support near 1.2215 and started an upward wave. It traded higher and cleared the 1.2230 and 1.2240 resistance levels.

It also attempted a close above a bearish trend line with resistance at 1.2270. However, there are many hurdles on the upside near the 1.2300-1.2315 levels. The mentioned resistance zone is near the 100 (red) and 200 (green) simple moving averages (4-hour).

Moreover, the 38.2% Fib retracement level of the last drop from the 1.2476 high to 1.2215 low is also near 1.2315. A break above the 1.2315 resistance may open the doors for more gains.

On the downside, the 1.2240 and 1.2215 levels are important supports.

Recently in the US, the Nonfarm Payrolls report for March 2018 was released by the US Department of Labor. The market was positioned for rise of 193K compared with the last 313K.

However, the result a bit disappointing as the US NFP came in at 103K and the last reading was revised to 326K. There was also no decline in the unemployment rate from 4.1%, whereas the market was looking for a decline to 4.0%. The report added that:

At 1.3 million, the number of long-term unemployed (those jobless for 27 weeks or more) was little changed in March and accounted for 20.3 percent of the unemployed. Over the year, the number of long-term unemployed was down by 338,000.

Therefore, there is a chance of a rise in EUR/USD towards the 1.2300 and 1.2315 levels in the near term.

Reuters reported that Trump's push for some form of NAFTA "agreement" before the Summit of the Americas in Lima could fail. It's widely rumored that Trump would at least want to have something "symbolic" to sign this week. But there are still many fundamental differences between the US with its NAFTA partners Canada and Mexico.

A source was quoted saying that even a symbolic agreement needs to contain "everything defined in black and white" and key issues could not be left open for negotiation afterwards. The source noted that a deal could be possible by the end of April or early May if discussions keep advancing.

It should be noted that CAD has been strongest one this month as seen in the monthly top movers table, as well as the M heatmap. It's mainly due to optimism that a certain form of NAFTA agreement could be delivered at the Summit of the Americas on April 13-14, or before. There is firstly, risk of sell-on-news, if the agreement is delivered. There is now secondly, risk of selloff on disappointment that it's not delivered. So, CAD traders, beware.

It's reported that North Korea is ready to discuss denuclearization with the US, and thus, increasing the chance of meeting between it's leader Kim Jong-un and US president Donald Trump in May. Financial Times quoted and unnamed National Security Council spokesperson saying that "I confirm that the United States and North Korea have been holding talks in preparation for a summit, and that North Korea has confirmed its willingness to talk about denuclearization." Reuters also quoted an unnamed official saying "the U.S. has confirmed that Kim Jong Un is willing to discuss the denuclearization of the Korean Peninsula‎."

Separately, China's Ministry of Commerce announced it's banned exports to North Korea with potential dual use in weapons of mass destruction. Details on 32 materials banned were released by the MOFCOM, including technologies and forms of equipment, including particle accelerators and centrifuges.

Minneapolis Fed President Neel Kashkari urged fed policy makers "should all be paying attention" to the escalation in trade tension between Trump and China. For now, "it's too soon for any of us to judge" and "none of us knows how to weigh the probability of these different outcomes." And, "how that washes out in overall inflation I think is hard to judge."

He said the impact to the economy is unknown for the moment as "this could be a lot of chest pounding". Or, "it could lead to a trade war." The end results, even something in the middle as usual during negotiations, could prompt business and investors to "pull back" and that could impact economic growth. Also, "the impact on Main Street is going to be seen over the long term."

Kashkari also noted that "uncertainty I think is scaring people a little bit."

Chicago Fed Charles Evans, a clearly known dove, expressed his optimism that inflation will hit 2% target and support for gradual rate hike on Saturday. He pointed to fiscal policy that "has been much more supportive of further growth". Hence, "the need for accommodative monetary policy is less than it was before."

And, now, given the "very strong" national economy and labor market, he would be surprised is inflation couldn't meet target. Evans added, "continuing our slow, gradual increases will be appropriate to get us to the point where monetary policy isn't really providing more lift to the economy."

GOLD - The commodity saw a recovery on Friday leaving risk higher. On the downside, support comes in at the 1,320.00 level where a break will turn attention to the 1,310.00 level. Further down, a cut through here will open the door for a move lower towards the 1,300.00 level. Below here if seen could trigger further downside pressure targeting the 1,290.00 level. Conversely, resistance resides at the 1,340.00 level where a break will aim at the 1,350.00 level. A turn above there will expose the 1,360.00 level. Further out, resistance stands at the 1,370.00 level. All in all, GOLD looks to pullback further lower