European Open: BOE and SNB could be live meetings today

Asian Indices:

Australia's ASX 200 index fell by -47 points (-0.67%) and currently trades at 6,968.60
Japan's Nikkei 225 index has risen by 520.94 points (1.93%) and currently trades at 27,466.61
Hong Kong's Hang Seng index has risen by 251.15 points (1.28%) and currently trades at 19,842.58
China's A50 Index has risen by 53.7 points (0.41%) and currently trades at 13,130.10

UK and Europe:

UK's FTSE 100 futures are currently down -23 points (-0.3%), the cash market is currently estimated to open at 7,543.84
Euro STOXX 50 futures are currently down -21 points (-0.51%), the cash market is currently estimated to open at 4,174.70
Germany's DAX futures are currently down -50 points (-0.32%), the cash market is currently estimated to open at 15,166.19

US Futures:

DJI futures are currently up 136 points (0.42%)
S&P 500 futures are currently up 18 points (0.45%)
Nasdaq 100 futures are currently up 58.25 points (0.46%)

The US dollar remained the weakest major overnight, following the Fed’s dovish 25bp hike
Fed fund futures imply a 64.8% chance of a pause at their May meeting, for 5% to be the terminal rate and are close to pricing in a 25bp cut in July
Whilst the Fed slightly upgraded inflation forecasts for 2023 and 2024, and several members still see rates going higher according to the dot plot, Janet Yellen’s comments on not providing ‘blanket insurance’ for US deposits has also knocked sentiment
Wall Street was dragged lower yesterday by banking stocks thanks to the combination of Yellen’s comments and Powell’s denial that the Fed intend to cut rates this year
Asian equities were mixed with the ASX leading Japan’s share markets lower, yet China’s market posted gains thanks to a weaker US dollar
NZD and AUD are the strongest majors, USD and CHF were the weakest
European futures point to a weak open as they try to close the gap with US equity markets

FTSE 100 daily chart:

The FTSE has rallied for three days, yet it has stalled at a resistance cluster which includes the August and December highs and the monthly S2 pivot point. Bears could either use a break beneath yesterday’s low or the 7500 handle to assume bearish continuation, with the 7400 / S3 zone making a viable initial target for bears to consider.

The SNB could hike rates by 50bp at 08:30 GMT:

Until recently, the consensus was for the SNB to hold rates at a relatively low level of 1%. Their rates were at -0.75% until their first 50bp hike in June, which was followed by a 75bp hike in September and then another 50bp in December. So even if they hike by 50bp today, the 1.5% level remains very low by global standards unless we compare it to the BOJ.

So it may be the press conference 09:00 which requires the greater attention to see if there are more hikes to come. And given that inflation was 0.7% m/m higher, the ECB and Fed have hiked and comments from President Jordan have been hawkish overall, I suspect it will be a 50bp hike despite the SNB having to get involved with the Credit Suisse saga.

BOE interest rate decision is at 2:00 GMT

Governor Bailey warned that incoming data ahead of today’s meeting could decide whether the BOE hikes or pauses, and with GDP, wages and inflation all pointing higher it is hard to see why they will not hike by 25bp today. And the case becomes stronger now the Fed have hiked by 25bp and the ECB by 50 despite recent turbulence.

So we really want to find out whether there is any discussion of a pause and / or we see less of an appetite for hikes at this meeting via the MPC votes.

Economic events up next (Times in GMT)

-- Written by Matt Simpson

Follow Matt on Twitter @cLeverEdge

How to trade with City Index

You can trade with City Index by following these four easy steps:

Open an account, or log in if you’re already a customer

• Open an account in the UK
• Open an account in Australia
• Open an account in Singapore
Search for the market you want to trade in our award-winning platform
Choose your position and size, and your stop and limit levels
Place the trade

This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this report, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs.

StoneX Financial Pte. Ltd., may distribute reports produced by its respective foreign entities or affiliates within the StoneX group of companies or third parties pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed to a person in Singapore who is not an accredited investor, expert investor or an institutional investor (as defined in the Securities Futures Act), StoneX Financial Pte. Ltd. accepts legal responsibility to such persons for the contents of the report only to the extent required by law. Singapore recipients should contact StoneX Financial Pte. Ltd. at 6826 9988 for matters arising from, or in connection with the report.

In the case of all other recipients of this report, to the extent permitted by applicable laws and regulations neither StoneX Financial Pte. Ltd. nor its associated companies will be responsible or liable for any loss or damage incurred arising out of, or in connection with, any use of the information contained in this report and all such liability is hereby expressly disclaimed. No representation or warranty is made, express or implied, that the content of this report is complete or accurate.

StoneX Financial Pte. Ltd. is not under any obligation to update this report.

Trading CFDs and FX on margin carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit www.cityindex.com/en-sg/terms-and-policies for the complete Risk Disclosure Statement.

ALL TRADING INVOLVES RISKS. LOSSES CAN EXCEED DEPOSITS.

City Index is a trading name of StoneX Financial Pte. Ltd. (“SFP”) for the offering of dealing services in Contracts for Differences (“CFD”). SFP holds a Capital Markets Services Licence issued by the Monetary Authority of Singapore for Dealing in Exchange-Traded Derivatives Contracts, Over-the-Counter Derivatives Contracts, and Spot Foreign Exchange Contracts for the Purposes of Leveraged Foreign Exchange Trading. SFP is also both Derivatives Trading and Clearing member of the Singapore Exchange (“SGX”). SFP is a wholly-owned subsidiary of StoneX Group Inc.

The information provided herein is intended for general circulation. It does not take into account the specific investment objectives, financial situation or particular needs of any particular person. You should take into account your specific investment objectives, financial situation or particular needs before making a commitment to invest, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit. No representation or warranty is given as to the accuracy or completeness of this information. Consequently, any person acting on it does so entirely at their own risk.

The information does not represent an offer of, or solicitation for, a transaction in any investment product. Any views and opinions expressed may be changed without an update. To understand the risks and costs involved, please visit the section captioned “Important Information” and the “Risk Disclosure Statement”.

The information herein is not directed to, or intended for distribution to or use by, any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction where such distribution, publication, availability or use would be contrary to law or regulation.

StoneX Financial Pte. Ltd. 1 Raffles Place, #18-61, One Raffles Place Tower 2, Singapore 048616. Tel: 6309 1000. Co. Reg. No.: 201130598R.

This advertisement has not been reviewed by the Monetary Authority of Singapore.