Forex Market Analysis: Economy Data and

April 27, 2024


US Dollar Impact and Economic Indicators

  • Recent weak PMIs have unsettled the US Dollar.
  • Key economic indicators this week include Q1 GDP on Thursday and Core PCE on Friday.
  • Despite a dip, potential for a short-lived US Dollar sell-off exists.
  • Early Q2 shows a slowing US economic upturn, as reported by S&P Global.

US Economic Performance and Projections

  • Early Q2 shows a slowing US economic upturn, as reported by S&P Global.
  • Business activity growth was below trend in April.
  • New business inflows decreased for the first time in six months.
  • Business output expectations have declined, hitting a five-month low amid growing economic concerns.

US Treasury Yields and Market Movements

  • Shorter-dated US Treasury yields have decreased following the PMI report but remain high.
  • The 2-year yield struggled to surpass 5%; rate cut expectations have reduced significantly.
  • A total of $183 billion in new US Treasuries will be auctioned this week.
  • Poor auction results could increase existing US Treasury yields.

Technical Analysis

  • The US 2-year yield chart suggests a possible bullish flag formation, indicating a potential re-test of the 5.26% high from October 19th.


Tesla Stock Performance and Strategic Shift

  • Tesla stock surged in pre-market trading following the announcement to accelerate the launch of more affordable electric vehicles (EVs).
  • This move contrasts earlier reports suggesting the company might abandon plans for cheaper car models.

Corporate Announcements and Timeline Adjustments

  • In the first-quarter shareholder release, Tesla updated its vehicle lineup to introduce new models sooner than planned, originally set for the second half of 2025.
  • CEO Elon Musk indicated on the earnings call that the launch of new vehicles could happen as early as 2025, potentially even later this year.

Financial Performance and Market Reaction

  • Despite missing revenue and earnings expectations, Tesla’s announcement positively impacted investor sentiment, with shares rising up to 11%.
  • Tesla reported first-quarter revenue of $21.30 billion, down 9% year-over-year, marking the first decline in four years.

Operational Highlights and Future Projections

  • First-quarter results showed $1.2 billion in operating profit and $1.5 billion in adjusted net income, both below forecasts and significantly lower than the previous year.
  • Delivery guidance remains lower, consistent with previous statements, reflecting challenges in production and demand.
  • Tesla introduced a ridehailing feature in its app previewing the upcoming Tesla robotaxi service.

Production and Sales Challenges

  • Q1 global deliveries and production numbers were below expectations, indicating potential weakening in global demand.
  • Recent price reductions in the US and China were responses to sluggish sales, impacting the stock negatively earlier in the week.

Key Dates and Future Events

  • Tesla plans to discuss its cheaper EV models and robotaxi service in more detail on August 8, the scheduled reveal date for the robotaxi.

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