(29 April 2020)DAILY MARKET BRIEF 2:Top sellers lying in ambush as WTI advances past $14 pb.

Moving to the economic calendar, Australia printed its highest quarterly inflation in five years. Consumer prices in Australia rose 2.2% in the first quarter of 2020 as wildfires and early effects of coronavirus outbreak led to a significant jump in food prices. The AUDUSD pulled out the 100-day moving average (0.6518) as solid inflation tamed the expectations of a further easing from the Reserve Bank of Australia (RBA).

In the US, investors have their eyes fixated to the US first quarter GDP data today, which should throw some light on the extent of the economic damage caused by the coronavirus outbreak and the following business shutdowns. A consensus of analyst expectations pencil in a 4% contraction, but even this figure could fall short of expectations. More importantly, the next quarter will likely print an uglier number. But any disappointment should rather translate into a stronger US dollar, as the greenback is the most reliable safe haven asset of the moment, and a risk-off move across the market should benefit to it, and the US treasuries. Later today, the Federal Reserve (Fed) will announce its latest policy decision. The chances are we won’t see fireworks from the FOMC meeting today; the Fed will likely sit on its hands, as it has already slashed interest rates to near zero levels, and done all it could to maintain a smooth liquidity in the short-term money markets. And it seems like it has been working smoothly so far.

The US dollar index is a touch below the 100 mark, pointing at a good risk appetite.

The EURUSD saw solid support near the 1.08 mark, but should bump into a decent resistance near 1.09 before Thursday’s European Central Bank (ECB) meeting.

Cable is preparing to test the 1.25 offers on the back of a softening US dollar.

Yen and Swiss franc are stronger against a softening USD in the run up to the US growth data and the Fed decision.

Yet, the winds could change direction fast as the US walks in. Hence, gold is back above the $1700 per oz after having tested the $1690 support yesterday.

Else, the weekly US crude oil inventories data is expected to confirm an additional 10-million-barrel buildup last week, less than the previous weeks where the US stockpiles rose by 15-20 million barrels, but significantly more than what the oil market in a never-seen storage crisis could absorb. Rising global glut coupled with an anemic global demand should continue weighing on oil prices, even though the Chinese manufacturing PMI due Thursday, should confirm a pickup in activity in the world’s biggest factory and give a short sigh of relief to the depressed oil markets. Meanwhile, the S&P recommended its clients to move from the actual June to July contract immediately. WTI crude advanced past $14 a barrel in Asia, but top sellers are lying in ambush within the $15/$20 range, provided that there is no apparent good reason for the market to reverse its course in the short run.