Intraday Market Thoughts

April Seasonal Notes

by Adam Button
Apr 2, 2019 10:36

The US dollar leads against all currencies, while the pound shifted from being the top performer in most of Monday until the final hours when otdropped by a full cent following UK Parliament's indicative votes in rejecting all options supporting a smooth Brexit. We note some of the historically strong seasonal trends in April. Thursday's Premium Long in DAX30 was closed yesterday for 250-pt gain, while today's Bitcoin high print at $5100 means our existing Bitcoin Premium long is up 40% since entering at $3600 in Feb. The Premium video below details our existing and future trades.

All four indicative votes late on Monday as a Labour whip on Customs 2.0 failed. It had been a good start to the week for the pound after the Markit PMI beat estimates but it was all dashed in moments when the votes were revealed.

Conservative whip Boles raised the stakes afterwards as he quit the party. Earlier in the day, a Conservative lawmaker also reversed course and said that if MV4 came to a vote he would switch and cast a ballot against it.

Aside from the mess in the UK, global markets started the month in an upbeat mood on the rise in the China PMI. The S&P 500 gained 1.2% as a sea of green swept across international markets and 10-year Treasury yields rose 9 bps to 2.50%.

The strong start to April for global equity markets shouldn't be a great surprise for seasonal watchers. April is one of the top months of the year. Other particularly strong trends (historically speaking):

It's the strongest month for oil, natural gas and (not surprisingly) the Canadian dollar.

It's the best month for the euro over the past decade.

It's by far the best month for the pound.

The US dollar tends to be weak, which may relate to a multi-year struggle for US stats agencies to seasonally adjust Q1 data but in 2018 (and presumably this year) they may have fixed it.

Act Exp Prev GMT
Final Manufacturing PMI [F]
52.4 52.5 52.5 Apr 01 13:45
ISM Manufacturing PMI
55.3 54.2 Apr 01 14:00
PMI Manufacturing
50.5 52.6 Apr 01 13:30
Services PMI
51.0 51.3 Apr 03 8:30
52.3 51.1 Apr 03 1:45
Eurozone Spanish Services PMI
55.0 54.5 Apr 03 7:15
Eurozone Final Services PMI [F]
52.7 52.7 Apr 03 8:00

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