GDP Friday

Having been away for a week from the markets there are many things that are catching our eyes here at Minter. Often times a break is helpful in trying to decipher what is short term noise and what is really important in the markets.

Today the market will be watching U.S. GDP which is out at 14:30 Oslo time.  The markets is looking for something between 2.0% and 2.2% for Q1  in addition we get the University of Michigan Consumer sentiment survey at 16:00 Oslo time, which will gives us an up to date feel for how positive the consumers are feeling.

We would guess that with unemployment being at lows, stocks being at highs that this number should be strong.

Charts we believe are key:

The USD continues to grind higher on rate and growth differentials.

In the EURUSD cross, the break of the 1.1250 and 1.1180 are important developments.  If this level holds we expect a test of 1.10 and lower in weeks ahead.

Gold has struggled on the back of the strong USD, interesting to see it managing to hold at the $1265/$1270 level.

We expect at some point in the 2nd quarter Gold will start it’s rally.  We will wait for a break above the trendline above $1310 for confirmation.

The S&P 500 is holding near the highs through the current reporting season.  We have seen some cracks in the armor.

It looks as though profits for S&P 500 companies are expected to decline 1.1% for Q1 (Reuters)  which is a big improvement compared to the expected drop of over 2% that the market was looking for before the announcements started coming.  The stage is set for a battle of the of the earnings reports, positive trade results and dovish Fed is enough to break and sustain higher levels.

Copper is often seen as a barometer for global growth, has broken its recent trendline support, but is still in the 280-300 range dating back to February.

UK Brent is holding its upward trend and now in the middle of a wedge pattern.  Iran sanctions and troubles in Venezuela, increasing violence in Libya are all contributing to sending prices higher, OPEC/Saudi Arabia has the ability to make up the loss, And Russia on Monday signaled it may decide to boost production.

There must be some heavy discussions, about trying to get top dollar and at the same time not encouraging even more of a ramp up of U.S. production.

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