Market Insights: 4/29/19

Action on the bid in U.S. Markets today was mostly as predicted. Euro traded higher throughout the Day ($XEU) with a softening $USD. We see today's weakness in the $USD as 100% technical. Taking a step back from the 1-day chart, and looking at the Euro ($XEU), you can see the technical banding, with the USD now (on a technical basis) at or near its high band mark. We don't view a softening of such position in a medium-term downtrend against this macro backdrop as anything but that. Gold ($XAU) actually softened in USD terms throughout the day. Taken together, what's that tell you about inflation in the U.S.? Not really there. The KBW Bank Index ($BKX) and some banks were bid - perhaps off Friday's headline strength in 1Q19 U.S. GDP. This is risk positive - recall our Weekly Newsletter (4/29/19, Issue 2), said risk could be bid through Wednesday, especially if tonight's overnight figures from CHN propel risk into the European arena, as we are leaning. At the same time 10yr UST (as we indicated) also slipped 3bps (note: when USTs and US Equity Markets are both bid that's cautionary in certain respects, watch for this later in the week). S&P500 was essentially carry-through from European futures before the open and was flat most of the day, sliding into the close. #NotInvestmentAdvice