Morning Call Script - 02 May 2024

Overnight asset drivers & the impending data calendar

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What’s Moved Overnight

• BoJ/MOF outperform Powell but still won't confirm their actions. 

• Fed is between cutting or holding: Markets chopped and changed around Powell's presser, he marked to market and delivered few surprises. He asked for patience as rate cuts were staying higher for longer, but was clear, there is still a high bar for any more hikes.

  • Reuters - Fed leaves rates unchanged, flags 'lack of further progress' on inflation

  • Bloomberg - Jerome Powell Offered Markets a Reprieve. It Vanished in a Blink

• BoJ/MOF: The real fireworks came from Asia as it appears Japanese authorities went to market again (still no comment from them). Driving USDJPY lower from 157.50 to 153 handle. We open back around 156.00... each wave of USD supply bounces. When do the hikes come to narrow the int rate differential? 

  • Nikkei Asia - Yen's surge after Fed announcement stirs another intervention talk

  • Bloomberg - Japan Tries to Maintain Mystery on Whether it Intervened on Yen

• Markets overnight felt the absence of China, who were out for a holiday....

  • Nikkei 38230, Crude $79.45, Brent $83.90, Gold $2315, XBT 57k, EUR 1.0715, JPY 155.65, GBP 1.2535, AUD 0.6540, CNH 7.2350, 10s at 4.61%.

• The European session will be focused on Final Manufacturing PMIs and we'll see some second tier data from the US.

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Have a great day, and keep smiling!

Podcast for the Commute

• The Market Huddle - The Rules Are Changing (guest: Warren Pies)

The Day Ahead

• EUR (08:50): French Final Mfg PMI

• EUR (08:55): German Final Mfg PMI

• EUR (09:00): Eurozone Final Mfg PMI

• USD (13:30): Initial Claims

• USD (13:30): Unit Labour Cost

• ECB's Lane (21:15)

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