Daily Market Outlook, May 3, 2024

Munnelly’s Macro Minute…

“Huge Apple Buyback Boosts Markets Ahead Of Pivotal US Payrolls”

On Friday, Asian stocks reached their highest level in 15 months, driven by the tech sector and Hong Kong stocks. Meanwhile, the yen strengthened, moving further away from its recent 34-year lows, following a week of suspected intervention by Japanese authorities. With Japan and mainland China markets closed, trading activity in the region is expected to be quiet as traders anticipate the release of U.S. nonfarm payrolls data later in the day. The oil price increased modestly overnight, but it has sharply decreased for the week, with the Brent crude price currently trading close to its lowest level since early March at around $84bbl. During after-market hours, Apple announced its quarterly results and forecast, surpassing modest expectations and also introducing a record share buyback program. As a result, its stock surged by almost 7% in extended trading.

The main focus this week has been on the US as markets anticipate signals for when the Federal Reserve will cut interest rates. Today, there is a busy US data calendar, with the labor market report being a key signal of economic conditions. Employment growth has mostly surprised on the upside so far this year, with the last report for March showing a rise of 303k, the largest monthly gain in over a year. There are some signs of market weakening, including declines in job vacancies and a slowing in turnover, but this has not yet affected unemployment claims or other job surveys. The expectation is for another strong monthly rise in April of 255k, close to the recent monthly average, as well as a small fall in the unemployment rate to 3.7%, slightly below consensus estimates. Interest also lies in the wage growth mentioned in the report, especially after an alternative measure of labor costs released earlier this week showed faster than expected growth in Q1. The expectation is for an April monthly wage rise of 0.3%, the same as in March. The April ISM services reading will provide further insight into US economic conditions, with the service sector continuing to look stronger despite a downside surprise in its manufacturing equivalent earlier this week.

Overnight Newswire Updates of Note

Traders Pull Forward First Fed Cut To November Ahead Of Jobs
US Shuffles Military Assets In Middle East After Gulf Pushback
ECB Is Not Pre-Committing To Particular Rate Path, Lane Says
Three Rate Cuts More Likely In 2024, Stournaras Tells Liberal
Labour Win Brexit Strongholds In Early Local Election Result
UK Store Footfall Falls As Wet Weather, Earlier Easter Weighs
Poll: RBA Set To Hold Rates In May, Only Cut Once By End-Year
Market Hunts For Japan Yen Intervention Signs In Fed Accounts
Oil Sees Biggest Weekly Drop Since February As War Risk Fades
Gold Set For Worst Weekly Run Since February On Rate Outlook
Apple Rallies On Upbeat Forecast, Record-Setting Stock Buyback
Glencore Studying An Approach For Anglo American, Sources Say

(Sourced from Bloomberg, Reuters and other reliable financial news outlets)

FX Options Expiries For 10am New York Cut

(1BLN+ represent larger expiries, more magnetic when trading within daily ATR)

EUR/USD: 1.0600 (899M), 1.0650 (618M), 1.0675-85 (1.8BLN)
1.0695-05 (2.07BLN), 1.0725-35 (1.31BLN), 1.0750-60 (1.3BLN)
1.0775-85 (822M), 1.0795-00 (1.35BLN), 1.0810-15 (1.0BLN)
USD/CHF: 0.9050 (201M), 0.9100 (402M), 0.9125 (220M)
GBP/USD: 1.2500 (450M), 1.2510-15 (348M), 1.2550 (205M)
1.2600 (302M). NZD/USD: 0.5950 (942M)
AUD/USD: 0.6450 (1.4BLN), 0.6475-80 (545M)
0.6490-00 (2.41BLN), 0.6510 (400M), 0.6520-25 (876M)
0.6535-40 (635M), 0.6550 (274M), 0.6600 (1.6BLN)
USD/CAD: 1.3515-25 (801M), 1.3600-10 (375M), 1.3635-40 (330M)
1.3650-55 (645M), 1.3700-10 (704M), 1.3850-55 ( 1.3BLN)

CFTC Data As Of 26/04/24

Japanese yen net short position is -179,919 contracts
Euro net short position is -9,989 contracts
Swiss Franc posts net short position of -42,562 contracts
British Pound net short position is -26,233 contracts
Bitcoin net position is 0 contracts
Equity fund managers cut S&P 500 CME net long position by 16,969 contracts to 833,074
Equity fund speculators trim S&P 500 CME net short position by 9,927 contracts to 183,864
Gold NC Net Positions: $201.9K vs previous $202.4K