German inflation increases from 2.2% to 2.4% and beat expectations. However, the currency struggles to witness significant gains.
Tesla is the best performing stock in pre-trading hours as the company strikes a deal with the Chinese Firm, Baidu, on advanced driver assistance features.
NASDAQ remains in the spotlight as Amazon, Apple and Qualcomm’s Earnings will be released throughout the week!
The NASDAQ aims to correct April’s pullbacks as earnings beat expectations and Bond Yields decline.
EURAUD – German Inflation Higher, But Struggles To Support The Euro.
The EURAUD trades lower against one of the better performing currencies for April, the Australian Dollar. The exchange rate trades 0.36% lower and continues to maintain its “sell” signals since the 23rd of the month.
The Australian Dollar is the third best performing currency of the day, only behind the Yen due to the government intervention and the NZD. The AUD is witnessing significant gains due to the country’s inflation rate, economic expansion and resilient employment sector. For the first time since October 2023, Australia’s inflation rate rose which lowered the possibility of an interest rate adjustment. The Australian inflation rate struggled to drop below 3.4% for 3 consecutive months and then rose 0.1% in the latest month.
The RBA has not made any changes to the current interest rate of 4.35%, which stands notably higher than that of the ECB. However, the likelihood of a rate cut remains low due to persistently high inflation. On the other hand, economists predict the ECB may be the first G10 member to cut rates. Even with the slight uptick in inflation, analysts still predict the ECB to cut by June 2024. Hence, one of the reasons why the EURAUD maintains a buy signal from moving averages and oscillators.
The 75-Bar EMA and the RSI on an 18-bar period indicate that sellers continue to control the exchange. However, the price has slightly risen after the latest German CPI which saw inflation rise 0.1%. Therefore, investors will be looking for a breakout at 1.63119 in order for the “sell” signal to remain intact.
USA100 – Tesla, Amazon and Apple Support The NASDAQ Before The US Open!
During Monday’s Asian and European trading, the NASDAQ rose by 0.54%, driven mainly by Tesla, Amazon, and Apple stocks. The index remains above key trend lines on medium-term timeframes, supported by fundamentals.
The fundamental elements refer to economic developments which tend to support the stock market. First, the US Bond Yields continue to retrace which makes the stock market more favorable and in the longer term lowers the cost of debt. In addition to this, the US Dollar also continues to decline prompting further demand from outside the US. However, the main driver remains last week’s earnings data and news developments.
The new developments are largely related to Tesla. Tesla has initiated a collaboration with the prominent Chinese company, “Baidu”, to introduce mapping and navigation technology. This move by Elon Musk signifies progress towards the implementation of highly sophisticated driver assistance functionalities in the largest automotive market worldwide. As a result, demand for the stock significantly rose and investors were quick to take advantage of the lower stock price.
In addition to this, investors are also heavily exposing funds to Amazon, Apple and Qualcomm which soon will release their earnings data. Ideally investors will want to see strong earnings data as well as positive employment data on Friday. However, if employment data significantly surpasses expectations, it can have a negative effect due to complications with interest rates.
Michalis Efthymiou
Market Analyst
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