Global Equities Rebound, Eurozone CPIs on Today’s Agenda

Investors’ Risk Appetite Improves Again

The dollar rebounded on Monday and during the Asian morning Tuesday, trading higher against most of the other G10 currencies. It gained the most versus CAD, SEK and JPY, while it underperformed only against AUD and NOK.

DAX — Technical Outlook

We can see that DAX had recently violated its short-term downside resistance line drawn from the high of February 20 th. Now the index seems to be stuck in a small range between the 9369 and 10000 levels. For now, we will stay slightly on the neutral side and wait for a daily close outside the range in order to consider a further short-term directional move.

Will Slowing Inflation Result in More ECB Action?

As for today, the main event on the agenda may be Eurozone’s preliminary inflation data for March. The headline rate is expected to have declined to +0.8% yoy from +1.2%, something supported by the declines in both the German CPI and HICP rates. No forecast is available for the core rate, but we see the case for a slide here as well. March was marked with lockdowns in most member states of the bloc and thus, with people staying home and refraining from spending, consumer prices in several products may have come under pressure. The exceptions may be pharmaceuticals and essential products, like food.

EUR/NZD — Technical Outlook

Since peaking sharply in mid-March, EUR/NZD continued to slide gradually, which led to a break of a short-term upside support line taken from the low of February 19 th. In addition to the slight negativity, we can draw a short-term downside resistance line taken from the high of March 23 rd, which if stays intact, could continue showing the direction for a while. However, in order for us to get a bit more comfortable with lower areas, we would like to see a drop below the 1.8168 area first, hence why we will take a cautiously-bearish approach for now.

As for the Rest of Today’s Events

During the early European morning, we already got the UK final GDP, business investment and current account data, all for Q4. The final GDP print confirmed its preliminary estimate, namely that the British economy stagnated during the last three months of 2019 after growing 0.4% qoq in Q3, while business investment accelerated to +1.8% yoy from +0.9%, beating expectations of a 0.6% slide. The nation’s current account deficitnarrowed to GBP 5.6bn from GBP 15.9bn. Given that these releases refer to a period before the coronavirus fast spreading, the pound barely reacted.



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