A rebound in the indexes does not mean a return to growth

We are in a blackout period, which means that no comments from Fed representatives will be released to the market. This is also information that another FOMC meeting is scheduled for next week. Today, the focus will be on PMI readings for Europe. The services index for the euro zone surprised with its results for February and March, leaving the recession area (above 50 points). Further improvement of the situation is expected.

Yesterday, indices in the USA and on the Old Continent recorded a positive session. Gold has been under downward pressure and the declines continue this morning. The EUR/USD rate is consolidating. The earnings season on Wall Street is slowly getting started.

A very technical market

The stock markets returned to growth after a weak period. DAX grew by 0,7 percent Monday's positive session was to some extent suggested by the candlestick pattern on the chart. So far, there has been a correction that has reduced the German benchmark's quotations by over 6%. came to an end. Today, before the opening of the stock exchanges, the CFD contract is gaining again, which may suggest a positive opening of trade. This does not mean, of course, that we will definitely return to growth. The declines that have accompanied us over the last dozen or so days have not reached such a wide range as those observed last year.

There is an interesting situation on the French CAC40 index. April's discounts are almost the same size as those that hit the market in mid-December 2023 and lasted until mid-January this year. In this case, the contract quotations also moved away from the upward trend line. The horizontal level also proved to be a support limiting further declines (minimum at the end of February and the beginning of March). We are dealing with a very technical market, which will certainly be appreciated by traders who base their investment decisions on a "clean" chart.

Gold has had a weak session, which reduced its valuation to the round level of USD 2300. The declines were suggested by the previously formed double top formation. Let us add that this pattern was within historical records, which further increased the risk of a "deeper" correction. So far, we are dealing with a kind of profit-taking phenomenon among some investors. This morning, the price of the contract based on the metal price was on the border with the lower band of the short-term growth channel. If it is broken, the path to around USD 2200 will open.

Disappointing data from Poland

Today will bring us a "flush" of preliminary leading indicators - April PMI indices. Europe will serve them first, followed by the United States in the afternoon. All indicates that we will receive better readings today than the March results. Recently, the index for services for the euro zone, the most reliable barometer for the economy, surprised positively in February and March and left the recession area. It will likely continue to rise in April and continue to signal economic expansion early in the second quarter. If this happens, today's data may support the euro. Move up on EUR / USD is possible, especially in the period when there are no comments from the FOMC and there are no key publications in the macro calendar for the US (ISM indices are more important).

Yesterday we received a data package from Poland. Industrial production fell more sharply in March (-6% y/y) than the market consensus indicated (-2% y/y). The worse result is the result of, among others, fewer working days. In turn, PMI deflation amounted to -9,6%. y/y, on a monthly basis, prices decreased by 0,1%. Construction and assembly production was also very disappointing (-13,3% y/y). Employment grew at a rate of 12%. (by consensus) a the average salary increased to over PLN 8,4 thousand. zlotys. Today we will receive the retail sales result. The zloty started the week with moderate weakening. Currently, the EUR/PLN exchange rate is 4,3220 and USD/PLN is 4,0560.

Source: Łukasz Zembik, OANDA TMS Brokers