S&P500 – close to ’11 highs

Apple followed Intel announcing solid results - EPS 6,40 USD vs. 5,35 USD expected and revenues at 24,67 bln USD – 6% higher than expected by the market, signaling that tech companies are ready to save the season. With earnings not adding a drag on equities, investors may take advantage of still favorable monetary policy. The next week brings a Fed meeting and while the Federal Reserve is broadly expected to announce an end to the intervention program in line with a schedule (at the end of June) it is also expected to continue reinvesting proceeds from the portfolio and (consequently), delay the first hike, probably until the beginning of the next year.

In this context, the S&P500 futures are very likely to pass a test for ’11 highs which are now less than 1% away.

EURUSD – looking towards 1,50?

In yesterday’s snapshot we continued to argue that the bears on the EURUSD had no fuel to change the trend, despite a good opportunity and a solid try on Monday. The pair not only recovered from that slump but also negated a (weekly) spin candle from the previous week – another sign of trend continuation. Should Ben Bernanke adjust his rhetoric to improved economic picture that all could change fast but the question is – if he didn’t do it for so long, why would he do that now? The market assumes that he will not and the bulls probably eye 1,50+ levels.

Events to watch – German Ifo, sales in UK, US claims and Philly Fed

With the Good Friday holidays, the final macroeconomic releases are left for today. Those include the German Ifo index (4.00 ET, 10.00 CET, consensus 110,5), UK retail sales (4.30 ET, 10.30 CET, consensus -0,5% m/m), US initial claims (8.30 ET, 14.30 CET, consensus 392k) and the Philly Fed (10.00 ET, 16.00 CET, consensus 37 points). Earnings will be announced by Morgan Stanley and GE (before the bell).    

Przemysław Kwiecień PhD, Chief Economist

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