STIR: Dovish Weekly Shift On Renewed Souring In Risk Sentiment And Dovish Data

• RES 4: 165.43 High Nov 8        
• RES 3: 164.90 High Dec 30 ‘24 and a key medium-term resistance   
• RES 2: 164.55 High Jan 7
• RES 1: 163.76/164.19 High Apr 25 / High Mar 18 and the bull trigger 
• PRICE: 161.80 @ 16:49 GMT Apr 30 
• SUP 1: 161.43/159.48 50-day EMA / Low Apr 9    
• SUP 2: 158.30 Low Apr 7 and key support 
• SUP 3: 157.02 76.4% retracement of the Feb 28 - Mar 18 bull cycle 
• SUP 4: 155.60 Low Low Mar 4 

A bullish theme in EURJPY remains intact and short-term weakness appears corrective. Key short-term support lies at 158.30, the Apr 7 low. A break of it is required to signal scope for a deeper retracement. This would open 157.02, a Fibonacci retracement. First support to watch is 161.43, the 50-day EMA. Attention is on 164.19, the Mar 18 high and a bull trigger. Clearance of this hurdle would resume the uptrend.   

• Stocks remain broadly weaker late Wednesday, off morning lows to near the middle of a wide session range. Currently, the DJIA trades down down 235.06 points (-0.58%) at 40291.68, S&P E-Minis down 44.25 points (-0.79%) at 5539.5, Nasdaq down 187.4 points (-1.1%) at 17273.72.
• Stocks had pared nearly half of the early session losses after solid PCE income growth reflected in the PCE data partially offset by tariff impacts, while pessimistic earnings kept a lid on further dip buying, Caterpillar declined .8% after lowering sales sales targets. Note, Microsoft and Meta trade lower ahead of earnings after the close (*).
• Laggers included Super Micro Computer down over 14.47% after missing earnings expectations late Tuesday, First Solar -9.73%, Garmin -9.50%, CoStar Group -8.72%, Norwegian Cruise Line -8.26%, International Paper -5.28% and Starbucks -6.47% after second quarter sales disappointed.
• Energy stocks retreated as crude prices continued to fall (WTI -2.19 at 58.23): ONEOK -7.20%, Targa Resources -4.95%, APA -4.68%, Kinder Morgan -4.19% and Diamondback Energy -3.73%.
• Some tech, industrial and health care stocks rejected the selloff: Seagate Technology +9.11%, Trane Technologies +7.94%, Western Digital +7.09%, Vulcan Materials +6.41%, PPG Industries +4.48%. Elsewhere, Regeneron Pharmaceuticals gained 4.39% while GE HealthCare Technologies +3.66%.
• *Earnings expected to release after today's close include: Wingstop, Allstate, Host Hotels & Resorts, QUALCOMM, eBay, Teladoc Health, Microsoft Corp, American Water Works, Crown Castle, Align Technology, Meta Platforms, Robinhood Markets, Equinix, Ventas, Albemarle Corp, MetLife, KLA and MGM Resorts.

The BOC's April 16 meeting deliberations released today (here) showed some debate over whether to ease rates for an 8th consecutive meeting, but overall reiterated the message from Governor Macklem that the policy stance would be less forward-looking given tariff-related uncertainty over both growth and inflation.

• The BOC did indeed consider cutting rates ("As they did at their March meeting, Governing Council members debated two options for the April monetary policy decision: maintain the policy interest rate or reduce it by 25 basis points.")  But ultimately "While there were differences in views, everyone agreed there was a great deal of uncertainty and the situation could change quickly. They also agreed they should be less forward looking than usual. Against this backdrop, members reached a consensus to maintain the policy interest rate at 2.75%."
• The tradeoff in risks discussed extensively by Gov Macklem was the key focus: "The growth vs inflation tradeoff Governing Council agreed to continue to focus on assessing the opposing pressures on inflation from weaker demand and higher costs. In doing so, they would pay particular attention to how much higher tariffs reduce demand for Canadian exports/how lower demand for exports impacts business investment, employment and household spending / how much and how quickly cost increases are passed on to consumer prices / how inflation expectations evolve. If new information pointed clearly to one side or the other of these opposing forces on inflation, Governing Council would be prepared to act decisively. Members agreed that in the face of tariffs, monetary policy should support the economy while maintaining its primary focus on price stability."
• On inflation, BOC officials saw higher shelter costs distorting the signal from core CPI: "Core measures of inflation were running a little under 3%, boosted by higher goods prices. It appears that core inflation measures are also being distorted by still-high inflation in shelter services. Members agreed they would need to look carefully at all subcomponents of the CPI data to gauge the trend of underlying inflation."