CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 76% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 76% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 76% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

Avalanche data from Japan, Asian and US stocks slightly lower

07:01 26 April 2019

Summary:

  • Tokyo inflation accelerates in April more than expected, it tends to be a proxy for inflation at a nationwide level
  • Japan’s industrial output disappoints, retail sales surprise slightly to the upside in March
  • Another bag of solid earnings from the US, Wall Street finished lower though

Macro readings from Japan dominate Asian trading

Asian trading was completely dominated by a lot of macroeconomic readings from the Japanese economy. The overall assessment is mixed. On the one hand, industrial production dropped 0.9% in monthly terms in March, the fastest pace of falls in almost four years. It also needs to be said that in annual terms the March’s decline (-4.6%) was the second consecutive one while the consensus had pointed to unchanged on a monthly basis. This release contrasts with what we have got from China recently (a sharp rebound in industrial output) and suggests no a material breakthrough in Europe in March.

Japan’s manufacturing production keeps stumbling reaching the lowest level since the start of 2015. Source: Macrobond, XTB Research

However, other releases turned out to be much better. First of all, Tokyo headline price growth for April sped up to 1.4% YoY from 0.9% YoY while the median estimate had called for a 1.1% YoY increase. Core gauged may also offer some hope as far as Japan’s inflation is concerned. The measure excluding fresh food jumped to 1.3% YoY from 1.1% YoY, whereas the indicator stripping out fresh food and energy accelerated to 0.9% YoY from 0.7% YoY. One needs to be aware that this series tends to be a proxy for price growth at a nationwide level (the data will be released in roughly three weeks). Nevertheless, taking into account the newest projections released by the Bank of Japan on Thursday one may expect the inflation objective will remain elusive in the foreseeable future. Hence, the yen ought to keep its safe haven status remaining a funding currency in carry trade strategies. Apart from regional inflation we were also offered retail sales for March which increased 0.2% MoM and beat the median estimate of 0% MoM. Moreover, the reading for February was revised up to 0.4% from 0.2% in monthly terms. Keep in mind that a pace of private consumption in Japan should remain quite solid given the still excellent condition of the labour market. While in March the unemployment rate increased to 2.5% from 2.3% (exp. 2.4%), it still hovers at extremely low levels. On the other hand, the job-to-application ratio held unchanged at 1.63. Last but not least, Japanese markets will be closed until May 6 due to public holidays.

After a failed attempt to break out of the consolidation the USDJPY moved down on Thursday. The nearest support is placed at around 109.8. Source: xStation5

Solid earnings from the US

Although Wall Street ended yesterday’s session below the flat line, a bag of earnings we got after the closing bell did not point to any reversal in the ongoing bullish trend. In general, such companies like Intel, Amazon, T-Mobile and Ford beat expectations, however, price reactions differed markedly. The largest fall in after-hours trading was seen in Intel shares (ca. 7%) after the company produced earning only subtly above expectations. EPS (non-GAAP) for the first quarter was $0.89 while revenue was $16.1 billion while the consensuses had pointed to $0.87 and $16.01 billion respectively. Huge gains (ca. 7%) in after-hours trading were seen in Ford shares as the company showed EPS of $0.44 vs. $0.26 expected and revenue of $40.3 billion vs. $37.1 billion expected. A big beat in terms of earnings was delivered by Amazon as its EPS was $7.09 vs. $4.67 expected, however, revenue matched expectations at $59.7 billion.

While the NASDAQ already hit its new all-time high, the Dow Jones keeps hovering below its record highs. Moreover, this index is the sole one which has failed to produce any gains so far this week. Source: xStation5

In the other news:

  • RBNZ’s Orr said there was still room for rate cuts if required

  • Australian PPI for the Q1 came in at 0.4% QoQ, prior was 0.5% QoQ; import prices declined 0.5% QoQ vs. +0.4% exp.

  • NIKKEI has fallen 0.2% just a while before the close, Shanghai Composite has declined 0.1%

This content has been created by X-Trade Brokers Dom Maklerski S.A. This service is provided by X-Trade Brokers Dom Maklerski S.A. (X-Trade Brokers Brokerage House joint-stock company), with its registered office in Warsaw, at Ogrodowa 58, 00-876 Warsaw, Poland, entered in the register of entrepreneurs of the National Court Register (Krajowy Rejestr Sądowy) conducted by District Court for the Capital City of Warsaw, XII Commercial Division of the National Court Register under KRS number 0000217580, REGON number 015803782 and Tax Identification Number (NIP) 527-24-43-955, with the fully paid up share capital in the amount of PLN 5.869.181,75. X-Trade Brokers Dom Maklerski S.A. conducts brokerage activities on the basis of the license granted by Polish Securities and Exchange Commission on 8th November 2005 No. DDM-M-4021-57-1/2005 and is supervised by Polish Supervision Authority.

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