LATVIA: PM Siliņa Resigns After Progressives Pull Support

Rough paraphrase from some of Mann's recent comments as she highlights the importance of the 3.5% threshold having asymmetric impacts on inflation expectations which can then impact wage expectations: "When you have a new shock which pushes inflation above the three or three and a half percent threshold, inflation expectations become very volatile and high, and inflation pass through becomes also high. So these are the kinds of thresholds we have, also asymmetries and variety of research that we do, but we get very concerned about a new shock that creates additional attentiveness, which may show up in wage expectations and wage demands, or the expectation that when inflation is going to be high."

• Oil prices have stabilised towards last week’s lows on Tuesday after President Trump told reporters that the right people from Tehran had initiated contact and that Iran wants to work a deal. This suggests the blockade may be acting as a catalyst for a diplomatic breakthrough rather than just a precursor to a prolonged conflict.
• Combined with a firmer equity backdrop, the dollar sits a touch lower on the session and the New Zealand dollar is outperforming. A session high of 0.5896 has extended NZDUSD’s recovery from last week’s lows to 3.75%, and yesterday’s close back above the 50-day EMA bolsters the bullish technical narrative. The next topside target is located at 0.5964 (Mar 10 high) before pivot resistance at 0.6000.
• While some may attribute a hawkish RBNZ angle to the recent price action, a former RBA official recently told MNI that they are sceptical of this narrative given a weak economic backdrop in NZ. They added the spread between Australian and New Zealand official rates is likely to widen further this year, with current RBNZ market pricing looking excessive.
• Australian data overnight explains the modest antipodean divergence on Tuesday, with much softer-than-expected consumer and business confidence indicators allowing AUDNZD to consolidate back towards 1.2050. Solid support was seen at 1.20 yesterday, a level in focus ahead of Australian employment data on Thursday.

Recent weakness in WTI futures is for now, considered corrective. The contract traded through the 20-day EMA, at $98.00. Attention for now is on support at the 50-day EMA, at $86.79. A clear break of the 50-day average is required to highlight a stronger short-term reversal. On the upside key resistance and the bull trigger has been defined at $117.63, the Apr 7 high. Clearance of this hurdle would confirm a resumption of the uptrend. Gold is in consolidation mode. Recent gains appear to be corrective, however for now, a short-term bull cycle is intact. The metal has pierced the 50-day EMA, at $4779.6. This signals scope for an extension towards $4914.9, a Fibonacci retracement point. Clearance of this level would open the $5000.0 handle. Initial firm support to watch lies at $4554.2, the Apr 2 low. A break of this level would be bearish.

• WTI Crude down $2.46 or -2.48% at $96.92
• Natural Gas down $0.03 or -0.99% at $2.601
• Gold spot up $47.03 or +0.99% at $4787.06
• Copper up $7.05 or +1.17% at $612
• Silver up $2.51 or +3.32% at $78.0811
• Platinum up $21.83 or +1.05% at $2096.33