Market Review- Fundamental Perspective- 05 April 2018

Market News
· Asian and US equities gained broadly overnight after an initial selloff triggered by China’s announcement of retaliatory tariffs on $50bn of US exports. Risk sentiment improved thereafter as the US indicated that it would negotiate on the tariffs which also supported a rally in USDJPY
o Concerns on NAFTA negotiations have also eased as US President Trump indicated a softer stance to a car manufacturing deal, which supported gains in MXN and CAD
· Euro area inflation for March was below expectations with core inflation at 1.0%. Data in the US also moderated as the ISM non-manufacturing index disappointed expectations with a print of 58.8 in March, although the levels remain in a healthy territory
· GBPUSD saw a volatile session yesterday after a weaker-than-expected print in construction PMI prompted an initial selloff of the GBP which it later retraced. Today focus lies on the services PMI data this morning where Barclays Research expects a print of 54.5
o Our traders currently see GBPUSD support at 1.3980-1.4015, while resistance lies at 1.4100 ahead of 1.4250-75. EURGBP support comes in at 0.8710 ahead of 0.8665, and resistance lies at 0.8800
· Today’s the RBI meeting takes place at 10.00. Barclays Research expects them “…to keep policy on hold and to remain on hold throughout the rest of 2018”

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