Daily Market Pulse

Recovery is gaining a firmer footing


The dollar index registered a 0.58% decline last week, extending losses to 1.43% against a basket of major peers since the beginning of April. The main catalyst behind the recent USD’s depreciation is the benchmark 10-year Treasury yield, which dipped to a one-month low of 1.528%, from as high as 1.776% at the end of March. Meanwhile, equity markets continued higher on the back of positive economic data, which provides further evidence that recovery is gaining a firmer footing. It is a relatively light week, with market players mainly focusing on Friday’s PMI surveys for April. The shortage of semi-conductors will be key here, in explaining some supply chain disruptions. Also, the first-quarter earnings season continues this week, with companies such as Netflix, Intel, Johnson & Johnson, and Snap reporting their results. Key figures coming up:

  • On Tuesday (04/20): Redbook | API Crude Oil Stock (Weekly)
  • On Thursday (04/22): Initial Jobless Claims (Weekly) | Existing Home Sales (Mar) | Chicago Feb National Activity Index
  • On Friday (04/23): Manufacturing and Services PMIs (Apr) | New Home Sales (Mar)


The European Central Bank will deliver its latest monetary policy decision on Thursday, but no changes are expected, as the Bank already changed the pace of emergency bond purchases at last month’s meeting amid escalating U.S. bond yields. Before that, German inflation figures for March are due out on Tuesday. Increased market sensitivity to prices will give the reading greater attention than usual. Wrapping the week up, Friday’s PMI surveys for April will also drive attention, with forecasts suggesting the bloc’s manufacturing activity growth slowed after hitting a record high last month and the services sector remained in contraction for an eighth consecutive month. Key figures coming up:

  • On Monday (04/19): EZ Construction Output (Feb) | EZ New Car Registrations (Mar)
  • On Tuesday (04/20): Germany Producer Prices (Mar) | ECB Bank Lending Survey
  • On Thursday (04/22): ECB Interest Rate Decision | EZ Consumer Confidence (Apr) | Italy Industrial Orders (Mar)
  • On Friday (04/23): EZ Manufacturing and Services PMIs (Apr)


Having appreciated 1% against the greenback last week, the Pound is set to extend gains over the upcoming week. The economic calendar is packed with key updates, which will provide a fresh impetus as the economy in Britain is reopening. Markets will receive labor market data (Tue), inflation numbers (Wed), and retail sales numbers (Fri). Flash PMI figures for April might show solid increases in both manufacturing output and services activity, reflecting the government support schemes, business reopening, and a rapid vaccine rollout. Key figures coming up:

  • On Tuesday (04/20): Unemployment Rate (Feb)
  • On Wednesday (04/21): Consumer and Producer Price Index (Mar) | BoE Gov Bailey Speaks       
  • On Thursday (04/22): CBI Industrial Trends Orders (Apr) | GfK Consumer Confidence (Apr)   
  • On Friday (04/23): Retail Sales (Mar) | Manufacturing and Services PMIs (Apr)


Over the last week, the Japanese Yen continued to trade tick-for-tick with Treasury yields recovering all losses registered at the beginning of the month. Now, the JPY trades within the mid-March range. Early in the week, March’s trade balance figures and finalized industrial production figures for February are due out. The strong demand in the global chip market improving prospects for exporters might be reflected in both indicators. Major economic data to follow include Tertiary Industry Activity Index (Apr) on Tuesday, Jibun Bank's flash PMI survey, and inflation rate on Thursday. Key figures coming up:

  • On Monday (04/19): Trade Balance (Mar) | Industrial Production (Feb) | Capacity Utilization (Feb)
  • On Tuesday (04/20): Tertiary Industry Activity Index (Apr)
  • On Thursday (04/22): Consumer Price Index (Mar) | Manufacturing and Services PMIs (Apr)


Last week, the Loonie continued to receive tailwinds from far more optimistic oil markets, which saw a one-month high driven by more positive demand forecasts. Apart from the oil narrative, market participants will closely watch the Bank of Canada (BoC) monetary policy meeting on Wednesday, with bullish traders betting that the BoC will taper their asset purchase program, while bearish ones are expecting that the BoC will keep unchanged the policy. Important data to follow include the Consumer Price Inflation rate, new house prices, and housing starts. Elsewhere, in terms of short-term expectations, the Covid-19 infections and hospitalization counts are probably the numbers to watch these days.  Key figures coming up:

  • On Monday (04/19): Housing Starts (Mar) | Federal Budget
  • On Wednesday (04/21): Consumer Price Index (Mar) | BoC Monetary Policy Report |  BoC Interest Rate Decision     
  • On Thursday (04/22): New Housing Price Index (Mar)


The Mexican Peso is hovering over its two-month high, which is a strong resistance level to be broken. In general, although the currency continues to be traded in a bullish channel, driven mainly by the external environment (positive data from the American economy and higher commodities prices), future gains will depend on solid domestic fundamentals. It is a particularly quiet week ahead. Later in the week, March’s labor market and mid-April’s consumer price inflation are due on Thursday. Wrapping the week up, retail sales data for February are expected to have the greatest influence in the week. Key figures coming up:

  • On Thursday (04/22): Unemployment Rate (Mar) | 1st Half-Month CPI (Apr)
  • On Friday (04/23): Retail Sales (Feb)


After a week packed with economic data, which showed that the country is recovering at a solid pace, the upcoming week is rather quiet. The People's Bank of China will provide an update on its loan prime rates on Monday, however, markets are expecting the bank to leave 1-year and 5-year rates unchanged. In general, the lack of material stats will leave the Chinese Yuan exposed to geopolitics developments, including U.S.-China, U.S-Russia relations, as well as conflicts in Iran. Key figures coming up:

  • On Monday (04/19): PBoC Loan Prime Rate


Political risks are high, after important developments, including last week’s Federal Supreme Court decision that makes former President Lula legally eligible to run in the 2022 presidential elections. Meanwhile, the Parliamentary Inquiry Committee (CPI) of Covid-19, which investigates possible omissions by the federal government, as well as states and municipalities in dealing with the Covid-19 pandemic, should start by Thursday. In general, the CPI installation may wear down the government, corroborating the perception of its flaws in the fight against the virus. On the economic front, it is a light week, with consumer confidence in Q1 in the spotlight. Key figures coming up:

  • On Monday (04/19): BCB Focus Market Readout | IBC-Br Economic Activity (Feb) | Consumer Confidence (Q1)
  • On Wednesday (04/21): National Holiday - Tiradentes Day
  • On Thursday (04/22): Federal Tax Revenue (Mar)

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