But risk-reward not convincing for longs unless we see a close above 100 in AUDJPY. Stocks to edge higher.

Overnight News Bullets

• SZ ZEW Survey (Apr) out at -3.5 vs. -20.5 expected.

• CA CPI MoM/YoY (Mar) out at 0.8%/2.3% vs. 0.6%/2.1% expected. Core CPI MoM/YoY (Mar) out at 0.3%/2.3% vs. 0.2%/2.3% expected.

• US Initial/Jobless Claims out at 339K/2531K vs. 320K/2510K expected.

• US Leading Indicators (Mar) out at 0.1% as expected.

• US EIA Natural Gas Storage at -46 vs. -48 expected.

• US Philly Fed (Apr) out at 0.2% vs. 2.0 expected.

• NZ Visitor Arrivals (Mar) at -1.0% vs. 6.6% prior.

• JN All Industry Activity Index (Feb) out at 0.9% vs. -0.3% expected.

• AU Conference Boeard Leading Index (Feb) out at 1.4% vs. -0.2% prior.

• AU Import/Export Price Index QoQ (1Q) out at -1.7%/0.0% vs. -1.0%/-0.3% expected.

Markets

• FX: EURJPY heading for it??™s seventh weekly gain as carry trade resurfaces.

• Fixed Income: Bunds and 10yrs not able to keep upside momentum, both fell y??™day. JGB lower o/n.

• Stocks: EU grinding lower, US leaning bearish. Nikkei up 0.5% today.

• Commodities: Precious metals lower, on back of drop in copper. Oil lower, June contract around $63.

O/N Data Heat map:

Calendar

Today's Highlights:

This and Next Week??™s Highlights:

What's going on?

• Carry Trades making a massive rejection of new lows. We could be headed much higher. But the risk-reward for new longs is too bad. We need a confirmation from a close above 100 in AUDJPY and 88.45 in NZDJPY.

• As long as S&P500 stays above 1462, we continue to look for higher levels. Likewise with DAX in 7040.

• Sector view: Health Care and Pharmaceuticals strongest, but massively overbought. Look for a reversal lower.

• Silver looks weak, but should reverse higher if the JPY continues lower.

FX