New to ADSS? Open an
account now to get started.
Already have an account?
New to ADSS? Open an
account now to get started.
Add funds to your ADSS account
Russia accused Ukraine of airstrikes on its southern border town. However, Kyiv rejected this claim. Meanwhile, Russian officials warned of dire consequences if Sweden and Finland joined NATO. WTI crude climbed more than 2% on Thursday.
South Africa’s mining production declined by 6% year-on-year in February, a 1.7% rise in the previous month. This was the steepest decline in mining activity since January last year and exerted pressure on the ZAR/USD forex pair.
Saudi Arabia’s annual inflation rate accelerated to 2% in March, from 1.6% in the prior month. Although this was the highest inflation rate since June 2021, it came in-line with market expectations. The SAR/USD pair remained broadly flat in forex trading this morning.
Brazil’s industry confidence indicator improved by 1.4 points to 56.8 in April. This was not only the highest reading since October 2021, but also was the first rise in confidence this year and lent support to the BRL/USD forex pair.
US’s initial jobless claims rose by 18,000 to 185,000 in the week ending April 9, above market expectations of 171,000. However, the people claiming jobless benefits remains close to the previous week’s 167,000, which was the lowest level since 1968. The US dollar index rose by more than 4% on Thursday.
What’s happening: US banking majors Citigroup, Morgan Stanley, Goldman Sachs and Wells Fargo reported their first-quarter earnings before the opening bell on Thursday.
What happened: Citigroup and Morgan Stanley managed to beat the consensus estimates for profits, despite a sharp decline in their first-quarter earnings.
Shares of Citigroup and Morgan Stanley rose slightly following their first-quarter print. However, share of Goldman Sachs slipped, while Wells Fargo’s stock tanked after they announced their results.
How were the results: JPMorgan had kickstarted the banking reporting season on Wednesday with sequential revenue growth but disappointing earnings.
Citigroup’s results: Revenue declined by 2% to $19.2 billion; but surpassed Street expectations by $1 billion. Earnings plummeted 46% to $4.3 billion, or $2.02 per share, mainly due to higher expenses and credit costs.
Despite the major downturn, Citigroup’s profits were higher than the market expectations of $1.55 per share. The bank’s results were boosted by high volatility on Wall Street due to the Ukraine crisis.
Citigroup has a bigger presence in Russia than other US banks and was forced to set aside $1.9 billion for potential loan losses due to the Ukraine war.
Morgan Stanley’s results: Revenues came in at $14.8 billion, marginally ahead of the consensus estimate of $14.2 billion. Earnings of $2.02 per share convincingly beat expectations of $1.68 per share.
Morgan Stanley reported higher-than-expected revenues from equity and fixed-income trading due to market volatility. Equity trading revenues of $3.2 billion were substantially higher than the estimate of $2.7 billion. Fixed income revenues of $2.9 billion also topped Street expectations of $2.2 billion.
Goldman Sachs’s results: Revenues came in at $12.93 billion, higher than market expectations of $11.83 billion. Profits declined by 42% to $3.94 billion, or $10.76 per share. However, the figure was substantially better than the Street expectations of $8.89 per share.
CEO David Solomon said during the earning call, “The rapidly evolving market environment had a significant effect on client activity as risk intermediation came to the fore and equity issuance came to a near standstill.”
Wells Fargo’s results: Revenues of $17.59 billion for the first quarter missed the consensus estimate of $17.8 billion. Although profits contracted by 21% to $3.67 billion, the bank’s earnings of 88 cents per share beat market expectations of 80 cents per share.
Wells Fargo’s bottom-line was hit by decelerating mortgage demand due to rising mortgage rates as the Federal Reserve continued hiking its benchmark interest rate to combat inflation.
How shares responded: Shares of Citigroup and Morgan Stanley closed higher by around 1% on Thursday. Goldman Sachs’s stock declined slightly, while Wells Fargo’s stock tanked almost 5%.
What to Watch: With US equity markets remaining closed for Good Friday today, investors will focus on earnings of other banking companies due for release on Monday, including Bank of America and Bank of New York Mellon.
Context: The CAD/USD forex pair lost more than 0.3% as the US dollar gained more strength on Thursday.
Details: The Canadian dollar lost steam on Thursday, after climbing during the previous session. Demand for the loonie was adversely impacted by a spike in bond yields.
The CAD/USD also declined due to strength in the US currency. The US dollar index, which measures the greenback’s performance against a basket of its major peers, rose by more than 0.4% to 100.30 on Thursday.
Traders also purchase more US dollars after the ECB kept interest rates unchanged at 0% at its April meeting on Thursday. The EUR/USD forex pair declined to a two-year low, following comments from ECB President Christine Lagarde indicating that the common bloc’s central bank was in no hurry to hike interest rates.
Meanwhile, the Canadian dollar came under producer with bond yields notching multi-year highs. The loonie also did not find support from a rise in the price of crude, which is one of Canada’s main exports and usually helps lift the currency.
The CAD/USD forex pair fell almost 0.5% to 0.7921, after having hit an intraday high of 0.7988.
What to watch: Traders await the release of employment and motor vehicle sales data from Canada due to be released later today. Employment in Canada, which had risen by a record high of 475,000 in February, is expected to be flat in March. Motor vehicle registrations are projected to decline to 94,264 units in January, from 103,694 units in December 2021.
Other Markets: European indices closed higher on Wednesday, with the FTSE 100, DAX 30, CAC 40, IBEX 35 and Stoxx 600 up by 0.47%, 0.62%, 0.72%, 0.94% and 0.67%, respectively.
|Technical Levels||News Sentiment|
|GBP/USD – 1.3006 and 1.3133||Negative|
|Ethereum – 2774 and 3314||Negative|
|S&P 500 – 34006 and 35018||Negative|
|Gold – 1918 and 1959||Positive|
|Nikkei 225 – 26152 and 27185||Positive|
India’s foreign exchange reserves, US’s NY Empire State manufacturing index, industrial production, manufacturing production, capacity utilization, overall net capital flows and foreign bond investment as well as Russia’s GDP.