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DAX (GER 40) EuroStoxx 50 And FTSE 100 (UK100) In Focus

DAX (GER 40) EuroStoxx 50 And FTSE 100 (UK100) In Focus

Jason Sen Jason Sen 25.02.2022 09:53
Dax 40 tested strong longer term moving average support at 14100/000 but ran almost as far as the next target of 13750/710. We have now established a base & I think a further recovery is likely. EuroStoxx 50 MARCH crashed as far as my lower target of 3750/40 with a high for the day exactly here & a 150 tick bounce. FTSE 100 MARCH crashed as far as 7141, just 11 ticks above strong support at 7130/10 with a 100 tick recovery. Update daily at 07:00 GMT Today's Analysis. Dax is now holding above strong longer term moving average support at 14100/000. We are holding short term 23.6% resistance at 14360/380 & this is the main challenge for bulls today. A break above 14410 therefore should be a buy signal targeting 14500 & 14600/650 & perhaps as far as strong resistance at 14750/850. Sell with stops above 14900. Strong longer term moving average support at 14100/000. A break below 13950 however could retest 13780/750. Less chance this will hold on the next test. EuroStoxx managed a bounce to 3810/00 & my next target of 3880/90. A break above 3910 signals further gains to 3950 & probably as far as strong resistance at 3985/95. Failure to beat first resistance at 3880/90 risks a slide to 3845/35 before a retest of support at 3750/40. FTSE crashed as far as strong support at 7130/10 before a bounce to 23.6% resistance at 7250/60. A break above 7275 signals further gains to strong resistance at 7320/40. Watch for a high for the day. A break higher however targets 7380/90 before a sell opportunity at 7435/55. To subscribe to this report please visit or email No representation or warranty is made as to the accuracy or completeness of this information and opinions expressed may be subject to change without notice. Estimates and projections set forth herein are based on assumptions that may not be correct or otherwise realised. All reports and information are designed for information purposes only and neither the information contained herein nor any opinion expressed is deemed to constitute an offer or invitation to make an offer, to buy or sell any security or any option, futures or other related derivatives.
European Indices: Dax (GER 40), FTSE 100 (UK 100) And EuroStoxx 500 Analysed

European Indices: Dax (GER 40), FTSE 100 (UK 100) And EuroStoxx 500 Analysed

Jason Sen Jason Sen 04.03.2022 10:24
Dax 40 shorts at resistance at 14000/100 were the perfectly trade with a high for the day exactly here & a 700 point collapse over night. EuroStoxx 50 MARCH breaks 500 day & 100 week moving average support at 3710/3690. FTSE 100 MARCH looks like it is building a head & shoulders top - with a volatile right shoulder! - UODATE!! the neckline at 7135/25 has been broken for a sell signal - a weekly close below here tonight will confirm the sell signal. Update daily at 07:00 GMT Today's Analysis. Dax shorts at 14100/000 work on the expected break below 13780/750 as we hit my target of 13350/300 before an excellent buying opportunity at 13130/100. Longs need stops below 13000. A weekly close below 13000 is a very important sell signal for the start of next week. Gains are likely to be limited with resistance at 13750/800 & obviously strong resistance at 14000/100. EuroStoxx this time breaks support at the 500 day & 100 week moving average at 3710/3690 for an important sell signal targeting strong support at 3590/70. Longs need stops below 3530. Longs at strong support at 3590/70 can target 3690/3710. FTSE breaks the neck line at 7140/30 for an important longer term sell signal. If prices recover & hold above 7160 we can consider a false break this morning. Bulls need a break above 7190/7200 for a buy signal today. Holding below 7120 targets strong support at 6960/30. To subscribe to this report please visit or email No representation or warranty is made as to the accuracy or completeness of this information and opinions expressed may be subject to change without notice. Estimates and projections set forth herein are based on assumptions that may not be correct or otherwise realised. All reports and information are designed for information purposes only and neither the information contained herein nor any opinion expressed is deemed to constitute an offer or invitation to make an offer, to buy or sell any security or any option, futures or other related derivatives.
Equities Of Europe Are Under Pressure

Equities Of Europe Are Under Pressure

Peter Garnry Peter Garnry 07.03.2022 15:17
Equities 2022-03-07 14:45 7 minutes to read Summary:  In today's equity note we show how European equities are being pushed to new lows relative to US equities as the maximum uncertainty in Europe is driving down equity valuation through the precautionary principle. Equities are about the future of cash flow and if the future has become totally unpredictable then investors must lower valuations on European equities driving up the equity risk premium. European equities are now valued at a 30% discount to US equities but it is still difficult to argue that this is a buying opportunity in European equities. We also cover the agriculture chemicals industry where especially American and Canadian fertilizer producers are reaping massive tailwinds from lower natural gas prices compared to competitors in Europe. Can you model the future amid the war in Ukraine? Global equities are only down 11% as of Friday’s close prices despite galloping commodity markets and large scale war on European soil. The probability of a recession has gone and the range of outcomes in the Ukraine war is almost infinite. It is the true definition of maximum uncertainty, which is a huge liability for equity valuations as equities are discounting growth and future cash flows. In its essence the war in Ukraine is the collapse of the future because the future has become so uncertain that under the precautionary principle of risks equity valuations have no other way than to go lower pushing up the equity risk premium. The war in Ukraine has pushed European equities to a new relative low against US equities measured in EUR total return terms since 1999. It really has been 15 years of hardship for European companies in terms of performance against the US and at one point investors will consider the opposite trade, but in the short-term European equities are too uncertain. In today’s session we were much lower in European before news came that Russia would cease its war on Ukraine if the Ukraine would make a change to its constitution to ensure neutrality (not entering any blocs such as NATO or EU), acknowledge Crimea as Russian territory, and recognize Luhansk and Donetsk as independent states. These demands are essentially the same as previously communicated by Russia, but the market is relieved sending equities higher because it is being interpreted as an opening for potential peace in Ukraine. Intraday volatility today shows that short-term sentiment is driving everything because “the future cannot be priced”.Source: BloombergSource: Bloomberg European equities are now valued at a 30% discount to US equities on a 12-month forward EV/EBITDA which of course reflects that the US economy is better shielded against the fallout from the war in Ukraine. The US has less risks in terms of energy and food security. One thing to note when seeing these European vs US equity valuation spreads is that the US equity market has a much larger share of technology stocks and which has increased over time. The best comparison is to take an entire sector. If we compare European industrials vs their peers in the US we see that the market was pricing European industrials higher throughout the pandemic indicating that things were improving relatively better for European industrials compared to US industrials. The trade reversed the summer 2021 as the energy crisis in Europe accelerated and the war in Ukraine has blown out the discount to almost 20% again and a new record low. Is it time to buy European equities? Given the maximum uncertainty regarding the outcomes of the war in Ukraine and sanctions against Russia we believe the most prudent thing is to be overweight US equities vs European equities. However, there are pockets in the European equity market that will do well such as green energy, defense, and mining companies. Agriculture chemical companies are a hedge amid food crisis As we have pointed out in several of our latest equity notes, the commodity sector, logistics, cyber security and defense stocks are the themes investors are rotating into. Inside the commodity trade and the energy crisis in Europe, an opaque industry such as agriculture chemicals is doing well. Or the US companies are doing well. Fertilizer prices have exploded higher over the past year due to the higher natural gas prices which is a key input in making fertilizer. However, the increasing spread between natural gas prices in the US and Europe, have given US and Canadian fertilizer producers an advantage over their European competitors which can also be seen in their relative performance. As long as the Ukraine war continues and we have upward price pressure on agriculture crops then this is trade that investors will continue to make. The jump higher in food prices has the unfortunate unintended consequence of potentially creating a humanitarian crisis around food security and this mobilize political forces to end the war in Ukraine as food security is a serious game for any country. The table below shows the companies in the agriculture chemicals industry with a market value above $5bnSource: Bloomberg
Fed Expectations Amid Mixed Data: Wishful Thinking or Practical Pause?

Japanese Yen (JPY) Being Healed, Nikkei Has Added 11%, Wheat Has Decreased By Ca. 8%

Marc Chandler Marc Chandler 30.03.2022 14:18
March 30, 2022  $USD, BOJ, China, Currency Movement, German, Inflation, Japan, Russia, Spain, Ukraine, Yield Curve Overview:  A pullback in US yields yesterday and the Bank of Japan's stepped-up efforts to defend the Yield Curve Control policy helped extend the yen's recovery.  This spurred profit-taking on Japanese stocks, where the Nikkei had rallied around 11% over the past two weeks.  Hong Kong, China, and Taiwan led the regional advance.  However, facing a surge in inflation (Spain and German states) and a jump in European natural gas prices (~9%) is snapping the Stoxx 600's three-day advance.  US futures are trading with a heavier bias.  The US 10-year yield has edged a little higher to 2.40%, while the two-year that briefly traded above the 10-year yield yesterday is off about four basis points.  European benchmark yields are 3-6 bp higher.  The greenback is trading lower against all of the major currencies, led by the yen's recovery.  After poking above JPY125 to start the week, the dollar fell to around JPY121.30 today before steadying.  The Canadian and Australian dollars are the laggards with minor gains.  Among emerging market currencies, the Turkish lira is the notable exception, and is posting a modest decline.  Gold appeared to post a bullish hammer pattern yesterday but there has not been much follow-through and the yellow metal is in around a $6 range on either side of $1922.  May WTI is also in a narrow range--mostly $105-$107 today. Copper and iron ore are trading firmer.  Wheat is still soft after losing around 8% over the past couple of sessions.   Asia Pacific The Bank of Japan stepped-up its efforts to cap interest rates earlier today.  It increased the amount of bonds it bought at its regular scheduled operation.  It offered to buy JPY600 bln (instead of JPY450 bln) 3–5-year bond, and JPY725 bln (instead of JPY425 bln) of 5-10-year bonds, in addition to the pre-announced defense of the 0.25% cap on the 10-year bond.  It did not increase the amount of longer-term bonds.  Tomorrow, the BOJ is expected to announce next quarters asset purchase plans.  Although BOJ Governor Kuroda, who met with Prime Minister Kishida earlier today, does not seem concerned about the yen's weakness, Finance Minister Suzuki seemed more cautious.  He suggested continuing to check if the yen's weakness is harming the economy.  For example, the weaker yen is aggravating the surge in energy prices, which Kishida was to cushion the blow to households and businesses. If intervention is best understood as an escalation ladder, as we suggest, then this might be seen as a low rung.  Separately, Japan reported that retail sales fell by 0.8% in February, which was more than twice the decline expected by the median forecast in Bloomberg's survey.  It also drove the year-over-year rate below zero (-0.8%) for the first time since last September.  Beijing has offered some economic support for Shanghai, but the surge in Covid there, and lockdowns there and elsewhere, are seeing economists slash growth forecast and lift inflation projections.  China's March PMI will be released tomorrow. A poor report is expected, and the risks are on the downside.  Thus far, though, officials have used targeted measures and have not provided the overall economy with new support. The dollar did not trade for long above JPY125 on Monday, but it seems to have completed something and the greenback has traded down to JPY121.30 today.   The (38.2%) retracement of this month's rally is around JPY121.10 and the next retracement (50%) is a little below JPY120.  Month-end and fiscal-year end considerations may also be at work but is often used as a catch-all narrative.  Note that reports suggested that Japanese retail accounts were beginning to buy yen toward the end of last week.  The Australian dollar bounced off four-day lows slightly below $0.7460 yesterday and settled above $0.7500.  It is firm today but below this year's high set Monday near $0.7540.  It still feels like it is consolidating.  The broad US dollar weakness was evident against the Chinese yuan today.  It is trading nearly 0.25% lower, the most in about two weeks.  The greenback is trading at a nine-day low near the 20-day moving average, slightly below CNY6.35.  That is also around the middle of this month's range (~CNY6.3080-CNY6.3860).  The PBOC set the dollar's reference rate at CNY6.3566.  The median projection in Bloomberg's survey was CNY6.3560.   Europe The common narrative now is that Putin initially anticipated a quick overwhelming victory over Ukraine and as it has stalled, he is falling back on Plan B.  Plan B is to secure the territorial claims of the two separatist regions and later incorporate them into Russia. Russia is curtailing the use of Hryvnia in the occupied areas and introducing the rouble. This military objective has not been met. Turning Clausewitz on his head, the political negotiations are a continuation of the war by other means. Putin has already achieved a key strategic goal; Ukraine will foreswear joining NATO.  One cannot help but wonder that if Zelenskiy accepted this more than a month ago, the course of events may have been different. The date for the next round of negotiations have not been set.  In a war, the losing side is more anxious for negotiations by definition. After consolidating its forces and enlarging the field of control of the separatist regions, Russia can then be in a position to negotiate.  This seems to be the key to the timeline that can lead to a sustainable cease-fire.  The cost of rebuilding Ukraine, which had serious developmental challenges before the war, will fall to the EU, IMF, World Bank, and UN.   A surge in eurozone inflation was expected, but the Spanish and German state figures are over the top. The market (Bloomberg median forecast) was for a strong 1.3% monthly increase in Spain, instead the national figure jumped 3%. The harmonized measure surged 3.9% this month and lifted the year-over-year rate to 9.8% from 7.6% in February.  Details are sparse in the initial estimate, but the Economic Minister suggested that three-quarters of the rise was due to food and energy.  Still, the core rate rose by 0.4% on the month. Most of the German states reporting CPI figures today showed a 2.6%-2.7% month-over-month increase in their CPI. The national and harmonized figures are due shortly.  There seems to be upside risk to the expectations that the year-over-year rate of the harmonized measures (HICP) will accelerate to 6.8% from 5.5% in February.  The aggregate preliminary estimate for the euro area is due Friday.  The euro rallied yesterday on the hopes that the Russian invasion of Ukraine may be near the endgame and is extending the gains today amid further positioning squaring.  We note that that the US premium over Germany on two-year money has reversed sharply lower.  It peaked on Monday above 245 bp and is testing 230 bp today.  The German two-year yield is up around seven basis points today and is again trying to secure a foothold above zero for the first time since 2014.  Yesterday's attempt was rebuffed.  The surging inflation will strengthen the hawks’ hands, many of whom see scope for two hikes this year that could bring the deposit rate to zero. The euro is trading at its best level since March 1, which was the last time it traded above $1.12. Its gains have now retraced a little more than half of this month's decline (~$1.1150).  The next technical target is the $1.1200-$1.1230 area.  Sterling is a laggard.  It is trading inside yesterday's range (~$1.3050-$1.3160). There may be scope for additional gains, albeit marginal, as the intraday momentum indicators are stretched.  We suspect the $1.3180-$1.3200 cap may suffice today.   America The US 2-10-year yield curve briefly inverted yesterday before finishing around three basis points.  It is drawing a great deal of attention, but like any statistic it needs to be placed in a context. Few believe the US is recession-bound.  The median forecast in Bloomberg's survey has the US economy growing 3.5% this year and 2.3% next year.  This is still above the Fed's estimates of the long-term growth trend (1.6%-2.2%.). The most pessimistic forecasts in Bloomberg's survey do have growth less than 1% this year or next.  That said, there are those who are warning of a recession, including ourselves, and the yield curve did not enter the picture.  Interest rates are not waiting for the Fed's meetings to increase, as the 93 bp increase in the 2-year yield this month.  The halving of the deficit (as a percentage of GDP) this year still strikes us as an under-appreciated drag.  The rise in energy and food prices cuts the purchasing power of households.  US inflation expectations are not just a function of what the Fed is or is not doing.  The correlation of the change in the 10-year breakeven (the difference between the yield of the inflation protected security and the conventional note) and oil (the front-month light sweet crude oil contact, WTI) over the past 30-days is nearly 0.65, the highest in seven months. The 60-day correlation is almost 0.55, a five month-high. The price of May WTI has risen by almost 25% ($20 a barrel) net since the US warned that a Russian attack could happen at any moment on February 11.  OPEC+ meets tomorrow and there still seems little chance that it will boost output.  Most of OPEC's spare capacity is in Saudi Arabia (~1.6 mln barrels a day) and the UAE (~1.3 mln barrels a day).   Today's ADP private sector jobs estimate is the data highlight. We remind that it is not a particularly useful guide to the BLS estimate for the particular month, though it gets the larger trend fairly right.  The median estimate for Friday's nonfarm payroll report has crept up in recent days to stand at 490k. The US also reports another revision to Q4 21 GDP.  It may be left at 7.0%.  With Q1 22 nearly over, the market will not be sensitive to Q4 data.  The economy is expected to have slowed to around 1.0%-1.5% this year from 7% last.  The Fed's Barkin and George speak today. While George is a voting member of the FOMC this year, Barkin, like Harker and Bostic, who spoke yesterday, do not.   Mexico reports February unemployment today.  It may have ticked up slightly.  Canada's economic calendar is light, but there is much talk about Ontario's imposition of a 20% tax on foreign purchases and real estate in the province.  The "speculation levy" is meant to slow the surge in house prices. Lastly, late yesterday Chile hiked its overnight target rate 150 bp to 7.0%.  This was a bit less than expected and the central bank indicated that it may not need to make such big moves going forward. Latam countries hiked rates early and many aggressively, and ideas that the tightening cycles may end later this year appears to be encouraging flows into local bond markets.  That said, the swaps market has about 300 bp of additional hikes over the next six months before a cut in rates toward the end of the year or early 2023.    The US dollar is near the recent trough against the Canadian dollar (~CAD1.2465-CAD1.2475).  Below there is the year's low around CAD1.2450.  A break targets the CAD1.2400 area. However, the intraday momentum indicators suggest the greenback may bounce first in early North American activity and a retest of CAD1.2500-CAD1.2515 would not be surprising.  Meanwhile, the greenback is slipping to new lows for the year against the Mexican peso (~MXN19.9120).  The next notable chart support is closer to MXN19.85, a shelf from last September. Here, too, the intraday momentum indicators favor a US dollar bounce in the North American morning.     Disclaimer
FX Daily: Eurozone Inflation Impact on ECB Expectations and USD

Not Again! CSI 300 And Hang Seng - COVID Makes Stock Market Struggle! EuroStoxx 600 and S&P 500 (SPX) Don't Set A Good Example

Marc Chandler Marc Chandler 25.04.2022 18:31
April 25, 2022  $USD, Australia, China, Currency Movement, Federal Reserve, France, Germany Overview:  Fears that the Chinese lockdowns to fight Covid, which have extended for four weeks in Shanghai, are not working, and may be extended to Beijing has whacked equity markets, arrested the increase in bond yields, and lifted the dollar.  Commodity prices are broadly lower amid concerns over demand.  China's CSI 300 fell 5% today and Hong Kong's Hang Seng was off more than 3.5%.  Most of the major markets in Asia Pacific were off more than 1%.  Europe's Stoxx 600 is off around 1.9% after falling 1.4% last week.  US futures are about 0.7%-0.8% lower. The S&P 500 fell last week for the third consecutive week, the longest losing streak in 18 months.  The US 10-year Treasury yield is almost seven basis points lower at 2.83%.  European benchmark yields are 4-6 bp lower.  The BOJ bought JPY727 bln of 10-year bonds at the pre-committed fixed rate operation, more than in the previous three operations last week combined.  The yield slipped half of a basis point.  The dollar rides high.  It has appreciated against all the major currencies but the yen. The Australian dollar, Scandis, and sterling have been hit the hardest and are around 0.9-1.2% lower in the European morning.  Emerging market currencies are heavy as well.  Hungary, Mexico, and China have seen their currencies decline by around 1% to lead the complex.  Gold fell to new lows for the month around $1912 before stabilizing.  June WTI is 4.3% lower near $97.70 after falling around 4% last week.  US natgas is extending last week's 10.5% sell-off, while the European benchmark is up 2.5% after a flat showing last week.  Iron prices are off 8.7%, after tumbling closer to 12% at one juncture today.  It fell a little less than 5% last week.  Copper is off around 2.1% after declining about 3% last week.  July wheat is up about 0.5% as it tries to snap a four-day slide.   Read next: Tightening Alert! How Have Exchange Rates Of Singapore Dollar (SGD), NZD, Canadian Dollar And Korean Won (KRW) Changed?| FXMAG.COM Asia Pacific China's Covid has emerged as a powerful economic force in its own right.   It is threatening demand for commodities and threatening to extend supply chain disruptions.  Shanghai reported a record number of fatalities, and the infection is spreading to Beijing.  The Chaoyang district will submit to three days of testing this week for people who live and/or work in the area.  Reports suggest 14 smaller communities have been sealed and another 14 have imposed limitations on movement.  China's demand for gasoline, diesel, and jet fuel has reportedly fell by 20% year-over-year, which may translate to 1.2 mln barrels of oil a day.   The US has threatened unspecified action if Beijing's new security pact with the Solomon Islands result in a permanent Chinese military presence.   While the US has defended Ukraine's right to make its own foreign policy decisions, it seems to want to limit Solomon Island's choices.  Prime Minister Sogavare has articulated his own 3 No's Policy.  He says that the secret treaty has no provision for a Chinese military base, no long-term presences, and no ability to project power from the islands. The Solomon Islands are about 2k kilometers of Australia's coast.    Read next: President Of France To Be Chosen. It Is Another Factor Which Is Shaping Markets| FXMAG.COM The dispute over the Solomon Islands has emerged as a campaign issue in the May 21 Australian elections.  Prime Minister Morrison, who seeks a fourth term, has defended his foreign policy, and tried shifting the focus back to domestic issues with a promise to cap tax revenue at 23.9% of GDP and A$100 bln of tax relief over the next four years if re-elected.  Government revenues were 22.9% of GDP in FY21.  Labor leader Albanese has been diagnosed with Covid at the end of last week.  This disrupted his campaign in the tight contest.  Morrsion had contracted the disease in early March.   The dollar initially approached JPY129 but falling US yields saw it come off and traded below JPY128, where a $425 mln option expires today.   The greenback remains in the range set last Wednesday (~JPY127.45-JPY129.40).  Indeed, it is trading within the pre-weekend range (~JPY127.74-JPY129.10).  The takeaway is two-fold.  First the exchange rate is still closely tracking the US 10-year yield.  Second, after surging in March and most of April, the exchange rate is consolidating.  The Australian dollar is falling sharply for the third consecutive session.  It fell 1% last Thursday and 1.75% before the weekend and is off another 1% today. It is lower for the 11th session in the past 14.  It fell to a two-month low near $0.7150 in late Asian turnover before stabilizing.  The $0.7200 area now offers resistance.  The sell-off of the Chinese yuan continued.  The greenback gapped higher and never looked back.  Recall that the dollar settled around CNY6.3715 on April 15.  A week later, last Friday, it settled above CNY6.50 and today, pushed over CNY6.56.  It is the greenback's 5th consecutive gain and today's advance of a little more than 0.9% is the largest advance since March 2020. The dollar is trading at its best level in nearly a year and a half.  The PBOC set the dollar's reference rate at CNY6.4909, slightly lower than market projections (CNY6.4911 in the Bloomberg survey). The next key chart area is CNY6.60.   Europe Macron was easily re-elected with a roughly 58%-42% margin.   Partisans, perhaps trying to bolster the turnout and some press accounts seemed to exaggerate Le Pen's chances.  No poll showed her in the lead.  Still, the euro initially trading higher (~$1.0850) before falling to almost $1.07 before the end of the Asia Pacific session.  The June parliamentary election will shape Macron's second term and his ability to enact his program.  Separately Slovenia voted not to grant Prime Minister Jansa another term.  This further isolates Hungary's Orban.  Golob, the former head of the state-owned power company before dismissed by Jansa, will lead what appears to be a center-left government.   Last week, Germany's flash PMI was mostly better than expected.   Recall that helped by the surprising gain in the service PMI, the composite fell to 54.5 not the 54.1 economists expected (median, Bloomberg survey).  Today, the IFO survey was also better than expected.  The current assessment ticked up to 97.2 from 97.1, while the expectations component rose to 86.7 from a 84.9.  The overall business climate reading rose to 91.8 from 90.8.  Separately, the government is expected to announce a supplemental budget on Wednesday that will boost this year's net new debt to at least 140 bln euros.  This is a 40 bln euro increase to fund government measures to cushion the impact of the war and the surge in energy prices.  Some of the off-budget 100-bln euro defense spending initiative will may also be funded this year.   The euro traded to almost $1.0705 in late Asia Pacific turnover, its lowest level since March 2020.   There is a 945 mln euro option struck at $1.07 that expires today.  The pre-weekend low near $1.0770 may now serve as resistance.  There are large options at $1.08 expiring over the next two days (1.6 bln euros tomorrow and 1.2 bln euros on Wednesday). The Covid-low was set in March 2020 near $1.06.  Sterling has been pounded again.  It dropped nearly 1.5% before the weekend, a roughly two-cent fall that took it to around $.12825.  It has lost another cent today to about $1.2730.  While we noted chart support near $1.2700, the next important chart area is closer to $1.25.  It finished last week below its lower Bollinger Band, and it remains well below it (~$1.2850) today. In fact, it is more than three standard deviations from the 20-day moving average (seen near $1.2755).   America St. Louis Fed President Bullard opined last week that a 75 bp hike may be needed at some juncture.   He explicitly said that it was not his base case.  Yet some in the markets, and more in the media seemed to play it up.  No other Fed official seemed to endorse it; Fed futures are pricing in a 51 bp for next week rather than 50 bp.  The Fed's quiet period ahead of the May 4 FOMC meeting means no more official talk.  Today's economic calendar features the Chicago Fed's March national activity index, which is reported with too much of a lag to provide new insight or a market reaction.  The Dallas Fed's April manufacturing survey is due as well.  The early Fed surveys have not generated a consistent signal.  The Empire State survey was stronger than expected while the Philadelphia Fed survey was weaker than anticipated.  The Dallas survey is expected to have softened.   Canada's calendar is light until Friday's February GDP print.   The Bank of Canada does not meet until June 1.  The swaps market currently has a little more than a 25% chance that it hikes by 75 bp instead of 50 bp.  However, the Canadian dollar itself seems more sensitive to the risk-off impulse spurred by falling equities than the policy mixed in Canada.   Mexico reports IGAE economic activity survey for February.   It is too dated to have much impact, and in any event, is being overwhelmed by the risk-off attitude.  The bi-weekly CPI report, covering the first half of April, released before the weekend, was stronger than expected.  The headline rate rose to 7.72% and the core rate rose above 7% for the first time in this cycle.  It is particularly disappointing because seasonal considerations, like the summer discount on electricity taxes, often point to less price pressures.  The risk of a 75 bp hike at the May 12 Banxico meeting is increasing.   Read next: How Are Markets Doing? US Bonds, EuroStoxx 600, CSI 300 And More| FXMAG.COM The US dollar jumped 0.65% against the Canadian dollar last Thursday and slightly more than 1% before the weekend.   It is up another 0.2% in the European morning to around CAD1.2740, after having approached CAD1.2760 in Asia Pacific turnover.  The greenback finished last week above its upper Bollinger Band and has spent most of today's session above it (~CAD1.2720).  The market is over-extended but there is little chart resistance ahead of CAD1.28.  The peso's fall is also continuing.  The US dollar traded above its 200-day moving average (~MXN20.42) for the first time since March 18.  It is also above the (38.2%) retracement objective of the slide since the March 8 high (~MXN21.46), which is found around MXN20.39.  The next retracement (50%) is closer to MN20.60 and the measuring objective of the potential double bottom is near MXN20.60.     Disclaimer

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