4/20 Weekly Macro Note (Easter Edition): Navigating Conflicting Signals, Yen Carry Trade Continues, Vision Update, Small Business Employment

In this Easter Sunday Weekly Macro Note - the team dives into conflicting macro signals, earnings, the yen carry trade, an update from the Vision Team, small business employment data, & more.

Navigating Conflicting Signals, Yen Keeps on Climbing (@DonMiami3, MacroEdge Chief Economist)

Good Easter Sunday evening, MacroEdge Readers & Community,

This evening we have an update from the Vision Team, a few key points from me below, and John’s take on some of the continuing market risks.

Gold continues to blow the doors off everything else — with spot nearing $3,400/oz (crazy) — and the DXY Dollar Index has weakened sharply (down almost 1% this evening), sending the USD to multi-year lows against many major currencies, including the Euro and GBP. The Yen briefly touched 141 versus the USD — a continued risk-off signal — although we’re seeing high-beta crosscurrents, with Bitcoin up about 3% this evening to $87,000, moving alongside gold, which is a little strange. It’s something worth keeping an eye on.

The week ahead is a busy one for earnings, and we continue to look out for signs of trade deals with any significant trading partners — unfortunately, we’re not talking about you, Palau. Markets remain on the “edge of Victoria Falls,” as I outlined on Friday evening, and this inflection point will likely determine the next 1–2 months of price action, at the very least. While some may highlight that Bitcoin is leading equities higher, there are lingering concerns — like the Yen — that continue to provide avenues for equity downside within the current technical setup.

All in all, it’s an important week with some meaningful earnings and data releases — although from a macro perspective, the data isn’t overly critical. Trade deal watch remains in the driver’s seat while earnings roll in. I’m not expecting the near-total embargo to show up in earnings data just yet, although guidance is the key to watch — particularly if companies begin issuing profit warnings for Q3 and Q4. The negative feedback loop we’ve discussed is something to stay cautious of.

Volume will likely pick back up later in the week as the news cycle intensifies and we transition out of the holiday period into a more active stretch leading up to Memorial Day.

Let’s dive into the data.

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Macro Data This Week 

Monday: n/a 

Tuesday: Richmond Fed data, Japan Jibun Bank Data

Wednesday: S&P Global Data, New Home Sales, Beige Book, Building Permits 

Thursday: Durable Goods, KC Fed data, Japanese Tokyo CPI Friday: UMich Consumer Sentiment Data, Inflation Expectations 

Lots and lots of earnings, including from MAGS names like GOOG.