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US Conference Board Consumer Confidence ticked down from downwardly revised 104.8 to 104.7 in March, below expectation of 107.2. Present Situation Index rose from 147.6 to 151.0. Expectations Index fell from 76.3 to 73.8.

Dana M. Peterson, Chief Economist at The Conference Board said: "Consumers remained concerned with elevated price levels, which predominated write-in responses... Indeed, average 12-month inflation expectations came in at 5.3 percent—barely changed from February's four-year low of 5.2 percent."

"Recession fears continued to trend downward... Meanwhile, consumers expressed more concern about the US political environment compared to prior months."

Full US consumer confidence release here.

Market picture

Crypto market capitalisation regained another 5% in 24 hours, peaking earlier in the day at $2.7 trillion against a recent peak of 2.7 in mid-March and around $3 trillion at the end of 2021. The recovery is faster than before the decline, promising prospects for further growth.

Bitcoin has once again surpassed the psychologically important 71K. The main intrigue of the next few days is the ability to overcome the previous highs at $73.7K. Strengthening above $75K will make the growth scenario up to 95.5 workable. But until then, one should be prepared for a re-intensification of selling in the first cryptocurrency.

According to CoinShares, investments in crypto funds fell by a record $942 million last week after two weeks of updating all-time highs in inflows. Investments in Bitcoin were down $904 million; Ethereum was down $34 million, and Solana was down $5.6 million. Investments in funds that allow for bitcoin shorts were down $4 million.

News background

Goldman Sachs said there is growing client interest in cryptocurrencies, fuelled by the approval of spot bitcoin ETFs in the US. Demand is mainly coming from traditional hedge funds. However, the institution intends to reach a “broader paradigm of clients”, including asset managers and banks and select cryptocurrency-focused companies.

Skybridge Capital founder Anthony Scaramucci advised bitcoin investors not to sell the cryptocurrency even if they are spooked by market volatility.

CommEX unexpectedly announced a complete shutdown on 10 May. Binance said the exchange “failed to fulfil its obligations” as part of a deal to sell the exchange’s Russian business to it.

Daily Pivots: (S1) 1.0812; (P) 1.0827; (R1) 1.0852; More...

Intraday bias in EUR/USD stays neutral for the moment, with consolidations from 1.0801 extending. Risk will stay on the downside as long as 55 4H EMA (now at 1.0862) holds. Below 1.0801 will resume the fall from 1.0980 to retest 1.0694 first. Break there will resume the decline from 1.1138 and target 100% projection of 1.1138 to 1.0694 from 1.0980 at 1.0536.

In the bigger picture, price actions from 1.1274 are viewed as a corrective pattern to rise from 0.9534 (2022 low). Rise from 1.0447 is seen as the second leg. While further rally could cannot be ruled out, upside should be limited by 1.1274 to bring the third leg of the pattern. Meanwhile, sustained break of 1.0694 support will argue that the third leg has already started for 1.0447 and possibly below.

Daily Pivots: (S1) 1.2602; (P) 1.2627; (R1) 1.2663; More...

Intraday bias in GBP/USD stays neutral, as consolidations from 1.2574 continues. Risk will stay on the downside as long as 55 4H EMA (now at 1.6905) holds. Below 1.2574 will resume the fall from 1.2892 to 1.2517 structural support first. Decisive break there will suggest that rise from 1.2036 has completed at 1.2892 already, and turn near term outlook bearish.

In the bigger picture, price actions from 1.3141 medium term top are seen as a corrective pattern to up trend from 1.0351 (2022 low). Rise from 1.2036 is seen as the second leg, which might still be in progress. But upside should be limited by 1.3141 to bring the third leg of the pattern. Meanwhile, break of 1.2517 support will argue that the third leg has already started for 38.2% retracement of 1.0351 (2022 low) to 1.3141 at 1.2075 again.

Daily Pivots: (S1) 151.13; (P) 151.35; (R1) 151.64; More...

Outlook in USD/JPY remains unchanged at consolidation from 151.82 is still extending. Intraday bias stays neutral at this point. Further rally is expected as long as 150.25 support holds. On the upside, decisive break of 151.93 key resistance will confirm long term up trend resumption. Next near term target will be 61.8% projection of 140.25 to 150.87 from 146.47 at 153.03. However, firm break of 150.25 will turn bias back to the downside for deeper pullback.

In the bigger picture, correction from 151.87 (2023) high could have completed at 140.25 already. Rise from 127.20 (2023 low), as part of the long term up trend, is probably ready to resume. Decisive break of 151.93 resistance (2022 high) will confirm this bullish case. Next medium term target will be 61.8% projection of 127.20 to 151.89 from 140.25 at 155.20. This will remain the favored case as long as 146.47 support holds, in case of another pullback.

Daily Pivots: (S1) 0.8977; (P) 0.8986; (R1) 0.9004; More....

USD/CHF's rally resumed after brief consolidations and intraday bias is back on the upside. Current rise from 0.8332 should target 100% projection projection of 0.8550 to 0.8884 from 0.8728 at 0.9062. Firm break there will target 0.9243 key medium term resistance next. On the downside, below 0.8964 minor support will turn intraday bias neutral and bring consolidations first. But outlook will stay bullish as long as 0.8884 resistance turned support holds.

In the bigger picture, price actions from 0.8332 medium term bottom as tentatively seen as developing into a corrective pattern to the down trend from 1.0146 (2022 high). Further rise would be seen as long as 0.8728 support holds. But upside should be limited by 0.9243 resistance, at least on first attempt.

Risk-on sentiment is pressuring e Swiss Franc and, to a lesser extent, Yen and Dollar today. DAX soared to new record highs, undeterred by the latest weak German consumer sentiment data, while CAC and FTSE are also marking gains. Similarly, the CAC and FTSE indices are registering gains, with U.S. futures indicating a positive start to trading.

Commodity currencies are seeing a broad upticks, led by New Zealand Dollar as it begins to recover from its recent setbacks. Euro also shows strength, while Sterling's progress appears slightly more tempered. Despite these movements, most currencies remain within the trading ranges established last week, with Swiss Franc being the only exception.

Australian monthly CPI data is poised to a focal point for the Asian markets. Analysts are forecasting a slight increase to 3.5% in March, attributed in part to the cessation of government energy rebates. It's important to note that the monthly CPI report offers only a partial update, with a comprehensive overview delayed until the quarterly release. Still, any downside surprise in the report could fuel speculation that RBA may start considering rate reductions sooner, placing Aussie under short-term pressure.

Technically, AUD/NZD is seen as extending the triangle pattern from 1.1085. After extending the rebound from 1.0567, AUD/NZD is starting to enter a zone where it could top and end this rebound. Break of 1.0836 support would be the first sign of topping and bring deeper pullback towards 55 D EMA (now at 1.0739).

In Europe, at the time of writing, FTSE is up 0.18%. DAX is up 0.76%. CAC is up 0.33%. UK 10-year yield is down -0.0235 at 3.969. Germany 10-year yield is down -0.005 at 2.371. US 10-year yield is up 0.230 at 4.269. Earlier in Asia, Nikkei fell -0.04%. Hong Kong HSI rose 0.88%. China Shanghai SSE rose 0.17%. Singapore Strait Times rose 1.10%. Japan 10-year JGB yield rose 0.0026 to 0.739.

US durable goods orders rises 1.4% mom in Feb, above exp 1.3% mom

US durable goods orders rose 1.4% mom to USD 277.9B in February, above expectation of 1.3% mom. Ex-transport orders rose 0.5% mom to USD 185.6B above expectation of 0.4% mom. Ex-defense orders rose 2.2% mom to USD 263.8B, above expectation of 1.3% mom. Transportation equipment orders rose 3.3% mom to USD 90.4B.

BoE's Mann signals market misalignment on rate cut expectations

BoE MPC member Catherine Mann cast doubts on the financial market's anticipation of interest rate cuts in the near term, asserting that such expectations might be overly ambitious.

Speaking to Bloomberg TV, Mann directly addressed the discrepancy, stating, "They're pricing in too many cuts — that would be my personal view — and so in some sense, I don't have to cut because the market already is."

Mann further elaborated on the unique economic conditions within the UK that challenge the notion of an early rate cut, especially in comparison with the US and Eurozone.

She explained that "wage dynamics in the UK are stronger and more persistent than the wage dynamics in either the United States or the euro area. Underlying services dynamics are also stickier more persistent than either the US or the euro area."

Thus, "it's hard to argue that the BOE would be ahead of the other two regions, particularly the United States," Mann added.

German GfK consumer sentiment edges up to -27.4, uncertainty overshadowing facts

In a modest uptick, Germany's GfK Consumer Sentiment Index for April has slightly improved to -27.4 from March's -28.8, marginally above expectation of -27.8. March's data revealed an improvement in economic expectations and income outlooks, with the former rising to -3.1 from -6.4 and the latter to -1.5 from -4.8. However, the willingness to make purchases marginally declined from -15.0 to -15.3, and the propensity to save saw a notable drop from 17.4 to 12.4.

Rolf Bürkl, consumer expert at NIM, characterized the recovery in consumer sentiment as "slow and very sluggish." He pointed to the fundamental pillars of real income growth and a stable job market as underpinning factors that could potentially catalyze a swift rebound in consumer sentiment.

However, the prevailing atmosphere of uncertainty and a discernible lack of future optimism among consumers is holding sentiment back. This sentiment, according to Bürkl, is stifled by the ongoing array of crises, manifesting in a pronounced reluctance to make purchases despite objectively favorable economic conditions.

"In a nutshell: The poor sentiment is overshadowing the facts," Bürkl noted.

Australia's Westpac consumer sentiment dips -1.8% mom, RBA triggers sharp decline

In March, Westpac Consumer Sentiment Index in Australia dropped by -1.8% mom to 84.4. This downturn is attributed to renewed concerns about the near-term economic outlook, with fears regarding inflation and interest rate hikes only easing marginally.

The survey revealed a significant shift in sentiment in responses to the RBA's latest policy decision. Sentiment scores were markedly higher at 94.9 for those surveyed before the decision, compared to a lower 79.3 for those surveyed afterwards.

The persistence of consumer concerns, notably regarding inflation and interest rates, was evident. Many had harbored hopes for a more reassuring update from RBA on these fronts. Yet, the central bank's governor did not entirely dismiss the prospect of additional rate hikes. This stance likely contributed to dampening consumer sentiment, as individuals grappled with the implications for personal finances and economic conditions at large.

USD/CHF Mid-Day Outlook

Daily Pivots: (S1) 0.8977; (P) 0.8986; (R1) 0.9004; More....

USD/CHF's rally resumed after brief consolidations and intraday bias is back on the upside. Current rise from 0.8332 should target 100% projection projection of 0.8550 to 0.8884 from 0.8728 at 0.9062. Firm break there will target 0.9243 key medium term resistance next. On the downside, below 0.8964 minor support will turn intraday bias neutral and bring consolidations first. But outlook will stay bullish as long as 0.8884 resistance turned support holds.

In the bigger picture, price actions from 0.8332 medium term bottom as tentatively seen as developing into a corrective pattern to the down trend from 1.0146 (2022 high). Further rise would be seen as long as 0.8728 support holds. But upside should be limited by 0.9243 resistance, at least on first attempt.

Economic Indicators Update

US durable goods orders rose 1.4% mom to USD 277.9B in February, above expectation of 1.3% mom. Ex-transport orders rose 0.5% mom to USD 185.6B above expectation of 0.4% mom. Ex-defense orders rose 2.2% mom to USD 263.8B, above expectation of 1.3% mom. Transportation equipment orders rose 3.3% mom to USD 90.4B.

Full US durable goods orders release here.

Gold price jumped on Tuesday and retested psychological $2200 barrier, inflated by weaker dollar on improved sentiment about Fed rate cuts and persisting geopolitical risks.

Market awaits release of US inflation data, due later this week, which could bring fresh hints about timing of the start of rate cuts.

Fresh strength attacks the ceiling of the recent range, after a short-lived spike to new all-time high last week.

Bullish technical picture on daily chart contributes to positive sentiment and underpins the action.

Sustained break above $2200 to generate fresh bullish signal for retest of new top ($2222), violation of which to signal continuation of a larger uptrend and expose targets at $2250 (Fibo 138.2% projection of the uptrend from 2022 low at $1614) and $2300 (psychological).

Near-term bias is expected to remain firmly with bulls while the price action stays above 10DMA ($2171).

Res: 2200; 2222; 2250; 2300.
Sup: 2184; 2170; 2146; 2131.

The Australian dollar has extended its gains on Tuesday. In the European session, AUD/USD is trading at 0.6557, up 0.26%. On today’s data calendar, the US will release two tier-1 events. Durable goods orders are expected to rebound with a 1.1% gain in February, after a 6.1% slide in January. The Consumer Board consumer confidence index is expected to tick up to 107 in February, up from 106.7 in January.

Australian CPI expected to rise slightly in February

Australia’s inflation rate is expected to creep up in the February report, which will be released on Wednesday. The market estimate stands at 3.4% y/y for February, compared to 3.4% in January.
That could set back expectations for a rate cut from the Reserve Bank of Australia, which has kept rates unchanged at 4.35% for four straight times. The markets are of the view that the RBA’s tightening cycle is done and have priced in a rate cut later in the year. Still, the RBA hasn’t ruled out rate hikes, with inflation still well above the 2% target.

The central bank needs to be sure that once inflation reaches the target, it can be sustained at that level and is likely to be very cautious before shifting policy and cutting rates. The RBA doesn’t meet until May and barring a huge surprise will again keep rates unchanged.

Australia’s Westpac consumer confidence declined 1.8% in March to 84.4, worse than the market estimate of -1.6%. The index has been below 100 since February 2022, indicative of prolonged pessimism about the economy. Consumer confidence took a hit after the 6.2% gain in February, as frustrated consumers didn’t see any signs of a rate cut at the RBA’s meeting earlier this month.

AUD/USD Technical

AUD/USD is testing resistance at 0.6551. Above, there is resistance at 0.6598
There is support at 0.6467 and 0.6420