InvestMacro

By JustMarkets

At the end of the trading day, the Dow Jones Index (US30) was down 0.02%, while the S&P 500 Index (US500) added 0.14%. The NASDAQ Technology Index (US100) closed positive 0.32% yesterday. Tuesday afternoon saw the emergence of short positions amid comments from Atlanta Fed President Bostic, who said he sees one Fed rate cut this year but is willing to change his mind toward additional rate cuts if the economic picture changes. In addition, weakness in industrial stocks, insurance companies, and telecommunication companies harmed the overall market.

Today, the US will release its monthly consumer inflation report. This report will affect the likelihood of a rate cut by the US Federal Reserve in June. Economists expect core inflation, which excludes food and fuel costs, to slow to 3.7% year-over-year from 3.8% in the previous month. However, overall inflation may rise to 3.2% y/y from 3.4% y/y. If the data comes out in line with forecasts, it would mean a mixed report for the US Fed. A decline in the core indicator (excluding food and energy prices) would indicate a continuation of the overall disinflation trend, while a rise in the overall indicator would likely reflect higher oil prices over the past month. Any surprise in the form of continued inflationary pressures will support the US dollar, especially as FOMC policymakers again discussed the possibility of holding rates longer on the back of strong economic data. While economists had previously planned for 3 rate cuts by the US Fed this year, they are now planning for 1-2 total cuts. This will be a green light for the dollar, putting pressure on risk assets, indices, and partly gold. However, gold could rise even as the dollar rises, which is rare. If the data comes out below expectations (inflation will fall more than the market expects), it will increase the probability of a rate cut in June, which will put pressure on the US dollar and lead to the growth of risk assets (euro, pound, franc), as well as support stock indices.

Nvidia (NVDA) closed down more than 2% after Intel said it is bringing to market a new artificial intelligence chip called Gaudi 3. Intel CEO Gelsinger said it will be faster and more energy efficient than Nvidia’s H100 chip and will be priced “well below” the cost of current and future Nvidia chips.

The first quarter corporate earnings season kicks off this Friday with the release of results from major banks, including JPMorgan Chase (JPM), Citigroup (C), and Wells Fargo (WFC). The consensus expects S&P 500 companies to average 3.9% y/y earnings growth in Q1, the lowest year-over-year earnings growth rate since 2019.

The Bank of Canada (BoC) will meet today. Markets are pricing at a 15% chance of a rate cut, so the BoCis is unlikely to cut rates at this meeting due to concerns about wage-led inflation. However, the BoC may give clearer signals that a rate cut will happen this summer. Oil prices will also influence the Canadian dollar, with any escalation in the Middle East likely to benefit the oil-exporting currency.

Equity markets in Europe were mostly down on Tuesday. Germany’s DAX (DE40) fell by 1.32%, France’s CAC 40 (FR40) closed down 0.86% yesterday, Spain’s IBEX 35 (ES35) lost 0.88%, and the UK’s FTSE 100 (UK100) closed negative 0.11% on Tuesday.

In its quarterly bank lending review, the ECB reported that demand for corporate credit in the Eurozone fell significantly in the first quarter as the region continues to suffer from elevated borrowing costs.

WTI crude oil prices traded near $85 a barrel on Wednesday after falling for two consecutive sessions. A larger-than-expected increase in US crude inventories and ongoing diplomatic talks between Israel and Hamas helped ease supply concerns. API data showed US crude inventories rose 3.034 million barrels last week, exceeding forecasts for a 2.415 million barrel increase and reversing a 2.286 million barrel decline the previous week. In the Middle East, the Hamas movement said it would study Israel’s ceasefire proposal and present its response to mediators, raising hopes of averting a wider conflict in the region. However, Iran’s Revolutionary Guard warned it could disrupt trade through the Strait of Hormuz if necessary, which could hit a fifth of the world’s daily oil consumption.

Asian markets were mostly up yesterday. Japan’s Nikkei 225 (JP225) gained 1.08% yesterday, China’s FTSE China A50 (CHA50) was down 0.38%, Hong Kong’s Hang Seng (HK50) was up 0.57% over yesterday, and Australia’s ASX 200 (AU200) was positive 0.45%.

The Reserve Bank of New Zealand (RBNZ) kept the official cash rate (OCR) at 5.5% at the April 2024 policy meeting, extending the rate pause for the sixth time and confirming market expectations. Policymakers noted that the current stance of monetary policy is appropriate to further reduce pressure on manufacturing capacity and inflation. Although core domestic inflation slowed to a two-and-a-half-year low of 4.7% in Q4 2023, it remained well above the 1-3% target. The Committee believes the OCR should remain at a restrictive level for an extended period to help annual consumer inflation return to the target range.

Bank of Japan data showed that producer prices in Japan rose by 0.8% year-on-year in March 2024, matching expectations and the highest since last October.

S&P 500 (US500) 5,209.91 +7.52 (+0.14%)

Dow Jones (US30) 38,883.67 −9.13 (−0.023%)

DAX (DE40) 18,076.69 -242.28 (−1.32%)

FTSE 100 (UK100) 7,934.79 −8.68 (−0.11%)

USD Index 104.11 −0.03 (−0.03%)

• – Japan Producer Price Index (m/m) at 02:50 (GMT+3);
• – New Zealand RBNZ Interest Rate Decision at 05:00 (GMT+3);
• – New Zealand RBNZ Rate Statement at 05:00 (GMT+3);
• – US Consumer Price Index (m/m) at 15:30 (GMT+3);
• – Canada BoC Interest Rate Decision at 16:45 (GMT+3);
• – Canada BoC Monetary Policy Report at 16:45 (GMT+3);
• – Canada BoC Press Conference at 17:30 (GMT+3);
• – US Crude Oil Reserves (w/w) at 17:30 (GMT+3);
• – US FOMC Meeting Minutes at 21:00 (GMT+3).

By JustMarkets

This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.

By JustMarkets

Stock indices closed slightly lower on Monday as the yields on 10-year T-notes rose to a 4-month-high. At the end of the trading day, the Dow Jones Index (US30) was down 0.03%, while the S&P 500 Index (US500) decreased by 0.04%. The NASDAQ Technology Index (US100) closed negative 0.05% yesterday.

Markets await Wednesday’s US consumer price report to determine the direction of the dollar and indices. They also await the first quarter corporate earnings season, which begins this Friday with results from major banks, including JPMorgan Chase (JPM), Citigroup (C), and Wells Fargo (WFC).

Tesla shares are up more than 4% after CEO Musk said the company will unveil its robot cabs on August 8. Nike (NKE) shares are up more than 1% and led the Dow Jones Industrials higher after Hedgeye Risk Management upgraded the stock to a “buy” from a “hold” rating.

Equity markets in Europe were mostly up on Monday. Germany’s DAX (DE40) rose by 0.79%, France’s CAC 40 (FR40) closed yesterday up 0.72%, Spain’s IBEX 35 (ES35) was down 0.04%, and the UK’s FTSE 100 (UK100) closed positive 0.41% on Monday.

UK retail sales in March 2024 rose by 3.2% y/y, the strongest increase since August last year, mainly due to the Easter holiday, which boosted food sales.

The Apr Sentix Eurozone Investor Confidence Index rose by 4.6% to a 2-year high 5.9%, stronger than expectations of 8.3%. German industrial production for February rose by 2.1% m/m, stronger than expectations of 0.5% m/m and the largest increase in 13 months. German trade data was mixed. German exports for February fell by 2.0% m/m, which was weaker than expectations of 0.5% m/m. Imports for February unexpectedly rose by 3.2% m/m vs. expectations of 1.2% m/m.

WTI crude futures rose to $86/bbl on Tuesday after falling to $84.3/bbl in the previous session as the latest ceasefire talks between Israel and Hamas in Egypt failed to progress. Israeli Prime Minister Benjamin Netanyahu said on Monday that Israel would continue the plans. A senior Hamas official also said they had rejected Israel’s latest ceasefire offer made at the talks in Cairo. Risks of further supply disruptions continued to drive oil prices higher as Iran vowed to retaliate against an alleged Israeli attack that killed Iranian generals in Syria.

Asian markets were mostly up yesterday. Japan’s Nikkei 225 (JP225) gained 0.91%, China’s FTSE China A50 (CHA50) declined 0.78%, Hong Kong’s Hang Seng (HK50) gained 0.05% over yesterday, and Australia’s ASX 200 (AU200) was positive 0.20%.

In Australia, consumer sentiment weakened for the second consecutive month in April as inflation and high-interest rates weighed heavily. A Westpac report said that while the Reserve Bank of Australia (RBA) has signaled that rates are unlikely to rise, it needs more confidence in the inflation outlook to consider cutting rates. Markets had been betting that the central bank would start cutting rates later this year, but robust employment data and rising house prices dampened the outlook. Meanwhile, business confidence improved in March but remained below the long-term average.

S&P 500 (US500) 5,202.39 −1.95 (−0.04%)

Dow Jones (US30) 38,892.80 −11.24 (−0.03%)

DAX (DE40) 18,318.97 +143.93 (+0.79%)

FTSE 100 (UK100) 7,943.47 +32.31 (+0.41%)

USD Index 104.14 −0.16 (−0.15%)

• – New Zealand NZIER Business Confidence (m/m) at 01:00 (GMT+3);
• – Australia NAB Business Confidence (m/m) at 04:30 (GMT+3).

By JustMarkets

This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.

By JustMarkets

Stock indices rose Friday on optimism that growth in the US economy will continue to drive consumer spending and corporate profits. Stocks rose even after a stronger-than-expected US payrolls report released Friday raised the likelihood of a longer-term interest rate hike. The Dow Jones (US30) Index was up 0.80% (for the week -1.64%), while the S&P 500 (US500) Index increased by 1.11% (for the week -1.02%). The NASDAQ Technology Index (US100) closed positive 1.24% on Friday (for the week -1.31%).

The US nonfarm payrolls for March rose 303,000, exceeding expectations of 214,000 and representing the largest increase in 10 months. The unemployment rate fell 0.1% to 3.8% in March, matching expectations. The US average hourly earnings fell to 4.1% y/y from 4.3% y/y in February, matching expectations and representing the slowest rate of growth in 2 years.

Fed spokeswoman Bowman said she still sees several upside risks to inflation and “it is not yet time” to cut interest rates. She added that it is possible that the federal funds rate level consistent with low and stable inflation “will be higher than it was before the pandemic, and if so, fewer rate cuts will eventually be needed to return our monetary policy stance to neutral.” Dallas Fed President Logan said on Friday that it was “too early” to cut interest rates because there are concerns that inflationary progress could stall and that price growth may not cool down to the Fed’s 2 percent target in a “timely manner.” The Fed’s hawkish comments on Friday drove bond yields higher and suggested that the Fed will not be cutting interest rates anytime soon. Markets rate the odds of a 25 bps rate cut at 6% for the next FOMC meeting on May 1 and 58% for the next meeting on June 12.

Tesla (TSLA) stock price fell more than 3% and topped the Nasdaq 100 losers list after reports that the company canceled its plans for a low-cost entry-level Tesla car.

The number of jobs in Canada was unchanged last month, but the fundamentals fared better. Average hourly earnings in Canada rose to a 4.5% m/m SAAR. This is a solid increase after 4.3% in the previous month. On the other hand, rising wages are a factor in rising inflation, which may force the Bank of Canada to delay plans to start cutting rates. The Bank of Canada is looking at an annualized rate of 5%, up a tick from the previous month. It means that wages are rising too fast relative to the inflation target.

Equity markets in Europe were mostly down on Friday. Germany’s DAX (DE40) was down 1.24% (for the week -1.64%), France’s CAC 40 (FR40) closed down 1.11% on Friday (for the week -1.89%), Spain’s IBEX 35 (ES35) fell by 1.58% (for the week -1.44%), and the UK’s FTSE 100 (UK100) closed negative 0.81% on Friday (for the week -0.26%).

Eurozone February retail sales fell by 0.5% m/m, weaker than expectations of 0.4% m/m. German Factory Orders in February rose by 0.2% m/m, weaker than expectations of 0.7% m/m. The German Import Price Index for February fell by 0.2% m/m and 4.9% y/y, weaker than expectations of unchanged m/m and 4.6% y/y. Swaps estimate the odds of a 25 bps ECB rate cut at 7% at the next meeting on April 11 and 97% at the next meeting on June 6.

WTI crude oil prices fell more than 2% to $85 a barrel on Monday as Israel withdrew troops from the southern Gaza Strip in response to mounting international pressure. Israel and Hamas also resumed peace talks in Egypt, easing tensions that have led to the recent surge in oil prices. Meanwhile, major oil exporter Saudi Arabia raised official selling prices for all grades of crude for Asia in May amid tightening global supply.

Asian markets were mostly down last week. Japan’s Nikkei 225 (JP225) fell by  4.07%, China’s FTSE China A50 (CHA50) declined 0.19%, Hong Kong’s Hang Seng (HK50) gained 1.17% for the week, and Australia’s ASX 200 (AU200) was negative 0.59%.

Bank of Japan Governor Kazuo Ueda said inflation will likely accelerate from “summer to fall” as a sharp wage rise will increase prices. It was his strongest hint yet of the possibility of another rate hike in the coming months. Ueda added that the central bank could “respond with monetary policy” if currency movements significantly affect inflation and wages, suggesting that a sharp fall in the yen could affect the timing of the next rate hike.

The Reserve Bank of New Zealand (RBNZ) is expected to quickly decide to keep interest rates unchanged at its meeting on Wednesday. Still, the central bank will have to deal with stagnant inflation amid growing financial stress. The official money rate is forecast to be kept at 5.5%, but there could be dovish adjustments to the forecasts. UBS believes that the RBNZ will wait until November before cutting interest rates.

On Sunday, the People’s Bank of China (PBoC) announced a 500 billion yuan “re-lending” program for technology innovation and transformation to support small and medium-sized technology enterprises. This week, investors await China’s latest inflation data for economic and monetary policy insights.

S&P 500 (US500) 5,204.34 +57.13 (+1.11%)

Dow Jones (US30) 38,904.04 +307.06 (+0.80%)

DAX (DE40) 18,175.04 −228.09 (−1.24%)

FTSE 100 (UK100) 7,911.16 −64.73 (−0.81%)

USD Index 104.29 +0.17 (+0.16%)

• – Switzerland Unemployment Rate (m/m) at 08:45 (GMT+3);
• – German Industrial Production (m/m) at 09:00 (GMT+3);
• – German Trade Balance (m/m) at 09:00 (GMT+3);
• – Switzerland SNB Chairman Thomas Jordan speaks at 18:15 (GMT+3).

By JustMarkets

This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.

By JustMarkets

US stock indices opened higher on Thursday on positivity from Wednesday, with Federal Reserve Chairman Jerome Powell reiterating his view that it would probably be appropriate to start cutting interest rates at some point this year. But by the end of the trading session, the stock market began a strong selloff amid hawkish comments from FOMC officials. Philadelphia Fed President Harker said inflation is still too high. Minneapolis Fed President Kashkari said a Fed rate cut may not be needed this year if progress on inflation stalls. At yesterday’s close, the Dow Jones (US30) index was down 1.35%, and the S&P 500 (US500) Index fell by 1.35%. The NASDAQ Technology Index (US100) closed negative 1.40%. The S&P 500 and Nasdaq 100 indexes fell to two-week lows, while the Dow Jones Industrials fell to a 2-week low.

The US trade deficit, a key indicator of the country’s economic health, widened to $68.9 billion in February 2024, the highest in ten months. This was up from an upwardly revised $67.6 billion in January, surpassing forecasts of a $67.3 billion deficit. The data reflected a $0.3 billion decline in the goods deficit to $91.4 billion and a $1.6 billion surplus in services to $22.5 billion. Notably, exports rose by 2.3% to a record high of $263 billion, while imports rose 2.2% to $331.9 billion. This data has implications for the dollar index, suggesting a positive trend.

The monthly Nonfarm payrolls labor market report, a crucial economic indicator, is set to be released in the US today. The US economy is expected to have added 205k new jobs in March, maintaining the unemployment rate at 3.9%. However, average hourly earnings are expected to have declined from 4.3% to 4.1% year-over-year. This report will be the focus of investor attention, with many anticipating a soft landing for the economy. If the data set is worse than expected, particularly in terms of wages, it could put pressure on the US dollar, benefiting risk assets and indices. Conversely, if the data set is generally positive, especially if NFP turns out to be hotter than expected, it could delay the likelihood of a rate cut, providing support for the dollar. In such a scenario, indices and gold would come under pressure.

Canada reported a trade surplus of CAD 1.4 billion in February 2024, up from a revised surplus of CAD 0.6 billion in January and well above market forecasts of a CAD 0.8 billion surplus. Exports rose by 5.8% for the month to CAD 66.6 billion.

Equity markets in Europe were mostly up on Thursday. Germany’s DAX (DE40) rose by 0.19%, France’s CAC 40 (FR40) closed yesterday up 0.02%, Spain’s IBEX 35 (ES35) added 0.53%, and the UK’s FTSE 100 (UK100) closed positive 0.48%.

The minutes of the latest ECB meeting showed that policymakers are increasingly confident that inflation will return to the 2% target and that the case for lower interest rates is strengthening. However, they emphasized that they must wait for further data on wages and service prices before taking any steps.

Escalating geopolitical tensions in oil-producing regions, OPEC+ efforts to curb supply and strong energy demand forecasts are provoking further oil price rises.

Asian markets were predominantly down yesterday. Japan’s Nikkei 225 (JP225) was up 0.81%, China’s FTSE China A50 (CHA50) and Hong Kong’s Hang Seng (HK50) were not trading yesterday, while Australia’s ASX 200 (AU200) was positive 0.45%.

The Reserve Bank of India (RBI) held the benchmark repo rate at 6.5% for the seventh consecutive meeting amid continued price pressures. The latest move came after annual inflation stood at 5.09% in February 2024, almost unchanged from January, after hitting a four-month high of 5.69% in December 2023, remaining within the RBI’s target range of 2-6% in the medium term. The RBI governor reiterated its commitment to bring inflation down to 4% on time and sustainably. The central bank also maintained its economic growth forecast for FY 2025 at 7%, with projections of 7.1% in Q1, 6.9% in Q2, and Q3 and Q4 at 7% each.

Australia’s trade surplus in goods for February 2024 fell to A$7.28 billion from a downwardly revised A$10.06 billion in the previous month, below market forecasts of A$10.4 billion. It was the smallest trade surplus since September last year as exports fell and imports rose.

S&P 500 (US500) 5,147.21 −64.28 (−1.23%)

Dow Jones (US30) 38,596.98 −530.16 (−1.35%)

DAX (DE40) 18,403.13 +35.41 (+0.19%)

FTSE 100 (UK100) 7,975.89 +38.45 (+0.48%)

USD Index 104.26 −0.55 (−0.53%)

• – Australia Trade Balance (m/m) at 03:30 (GMT+3);
• – UK Construction PMI (m/m) at 11:30 (GMT+3);
• – Eurozone Retail Sales (m/m) at 12:00 (GMT+3);
• – US Nonfarm Payrolls (m/m) at 15:30 (GMT+3);
• – US Unemployment Rate (m/m) at 15:30 (GMT+3).
• – Canada Unemployment Rate (m/m) at 15:30 (GMT+3);
• – Canada Ivey PMI (m/m) at 17:00 (GMT+3).

By JustMarkets

This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.

By JustMarkets

Stock indices traded mixed on Wednesday, with the Dow Jones Industrials (US30) falling to a two-week low. Stocks rebounded late in the day after bond yields retreated from early highs following an unexpected decline in the ISM Services Business Activity Index for March in the US. At yesterday’s close, the Dow Jones (US30) index was down 0.11%, while the S&P 500 (US500) Index was up 0.11%. The NASDAQ Technology Index (US100) closed positive 0.23%.

The March US employment change from ADP rose by 184,000, which was stronger than expectations of 150,000. Additionally, the February ADP figure was revised upward to 155,000 from the previously reported 140,000. The data points to a robust US labor market.

Atlanta Fed President Bostic said yesterday that due to the uneven nature of inflation progress, it will likely be appropriate for the Fed to cut interest rates later this year, in the fourth quarter.

Ford Motor (F) shares closed higher by more than 2% after the company reported a 7% increase in US auto sales in the first quarter due to strong demand for gas-electric hybrid vehicles. Intel (INTC) is down more than 8% and topped the list of losers on the Dow Jones (US30) and NASDAQ (US100) markets after the company said losses in its fab business have gotten worse, and the division may not reach its break-even point for several years.

Equity markets in Europe were mostly up on Wednesday. Germany’s DAX (DE40) rose by 0.46%, France’s CAC 40 (FR40) closed up 0.29%, Spain’s IBEX 35 (ES35) added 0.52%, and the UK’s FTSE 100 (UK100) closed positive 0.03%.

The Eurozone Consumer Price Index for March declined to 2.4% y/y from 2.6% y/y in February, better than expectations of 2.5% y/y. The core CPI declined to 2.9% y/y in March from 3.1% y/y in February, better than expectations of 3.0% y/y and the slowest growth rate in 2 years. The Eurozone unemployment rate for February was unchanged at a record low of 6.5%, beating expectations of a decline to 6.4%. The disinflation trend coincided with recent remarks by ECB policy director Robert Holzmann, who said that a slowdown in price growth could make a June rate cut appropriate.

Financial stocks led the gains on the corporate front, with BNP Paribas, Intesa Sanpaolo, and Santander adding more than 1.5%. German auto giants also rose significantly, with Volkswagen adding 2.5% and BMW jumping more than 5%. Finally, Siemens closed in the green after clarifying that it has no plans to make an offer to buy British engineering company Renishaw.

WTI crude oil prices fell slightly and are trading just below $86 per barrel after the latest EIA data showed an unexpected rise in US inventories. US crude inventories rose by 3.21 million barrels instead of the expected decline of 1.511 million barrels. Nevertheless, prices remained near 5-month levels as traders were concerned that the Middle East’s geopolitical tensions could disrupt oil supplies. In addition, OPEC+ countries decided to extend a voluntary production cut of 2.2 million barrels per day until June to stabilize the market.

Copper prices rose to $4.2 a pound, the highest since April last year, amid a weaker dollar after evidence of falling inflation strengthened the case for lower interest rates. Data compiled by ISM showed that prices in the service sector rose by the least in four years. Copper prices were also boosted by good economic data from China, which refuted fears of weaker demand in the country.

Asian markets were mostly down yesterday. Japan’s Nikkei 225 (JP225) fell by 0.97%, China’s FTSE China A50 (CHA50) decreased by 0.31%, Hong Kong’s Hang Seng (HK50) was down 1.22% by Wednesday’s close and Australia’s ASX 200 (AU200) was negative 1.34%.

Judo Bank Australia’s composite business activity index rose to 53.3 in March 2024 from 52.1 in the previous month. Australia’s private sector output growth accelerated sharply at the end of the first quarter, reaching the fastest pace in almost two years. This was mainly due to strong service sector growth, although output continued to contract.

S&P 500 (US500) 5,211.49 +5.68 (+0.11%)

Dow Jones (US30) 39,127.14 −43.10 (−0.11%)

DAX (DE40) 18,367.72 +84.59 (+0.46%)

FTSE 100 (UK100) 7,937.44 +2.35 (+0.03%)

USD Index 104.26 −0.55 (−0.53%)

• – Australia Services PMI (m/m) at 01:00 (GMT+3);
• – Australia Retail Sales (m/m) at 03:30 (GMT+3);
• – Switzerland Consumer Price Index (m/m) at 09:30 (GMT+3);
• – German Services (m/m) PMI at 10:55 (GMT+3);
• – Eurozone Services (m/m) PMI at 11:00 (GMT+3);
• – UK Services PMI (m/m) at 11:30 (GMT+3);
• – Eurozone Producer Price Index (m/m) at 12:00 (GMT+3);
• – Eurozone ECB Monetary Policy Meeting Accounts at 14:30 (GMT+3);
• – Canada Trade Balance (m/m) at 15:30 (GMT+3);
• – US Trade Balance (m/m) at 15:30 (GMT+3);
• – US Initial Jobless Claims (w/w) at 15:30 (GMT+3);
• – US Natural Gas Storage (w/w) at 17:30 (GMT+3).

By JustMarkets

This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.

By JustMarkets

At the end of yesterday, the Dow Jones Index (US30) was down 1.00%, while the S&P 500 Index (US500) decreased by 0.72%. The NASDAQ Technology Index (US100) closed negative 0.95%. Stocks declined as 10-year T-note yields rose to a 4-month high on Tuesday amid strong economic data. The US ISM manufacturing index rose the most in 1.5 years, dampening prospects for a Fed rate cut.

San Francisco Fed President Daley said yesterday that three 25 bps rate cuts in 2024 are a “reasonable baseline projection”. However, there is no need to cut rates now, given the economy’s strength. She added that if inflation is more resilient, the Fed could cut rates less, and if inflation falls faster, a rate cut may be warranted.

The February JOLTS survey unexpectedly increased US job openings by 8,000 to 8.756 million, indicating a stronger labor market than expectations of a decline to 8.730 million.

Tesla (TSLA) is down more than 5% and topped the NASDAQ (US100) losers list after reporting first-quarter vehicle deliveries of 386,810 units, well below the consensus forecast of 449,080 units.

Bitcoin (BTC/USD) fell more than 5% to a one-week low on Tuesday, dragged down by falling demand for bitcoin ETFs and stronger-than-expected US economic news that pushed back the prospect of a Federal Reserve interest rate cut. According to Bloomberg, investors withdrew $86 million from 10 spot bitcoin ETF funds on Monday.

Equity markets in Europe were mostly down on Tuesday. Germany’s DAX (DE40) fell by 1.13%, France’s CAC 40 (FR40) closed down 0.92% yesterday, Spain’s IBEX 35 (ES35) declined 0.89%, and the UK’s FTSE 100 (UK100) closed negative 0.22%.

S&P’s Eurozone Manufacturing PMI for March was revised upward by 0.4 to 46.1 from a previously reported reading of 45.7. The ECB’s 1-year inflation expectations for February fell to 3.1% from 3.3% in January, the lowest in 2 years. The Eurozone will release March inflation data today, which will be closely watched amid speculation that the European Central Bank is preparing to cut rates in June. Eurozone inflation has remained high since the start of the year and needs to fall further for the ECB to go for a summer rate cut, so the next three inflation reports are key for markets. If inflation delivers an upward surprise, bets for a rate cut will be pushed back.

WTI crude prices rose above $85 a barrel on Tuesday, hitting their highest level since October. Oil supplies faced fresh threats from attacks on Russian energy facilities by Ukraine and escalating conflict in the Middle East. Iran vowed to retaliate against Israel for an airstrike that killed two of its top generals and five other military advisers at the Iranian embassy compound in Damascus. In addition, Mexico’s state-owned oil company Pemex is set to cut crude exports in the coming months, adding to fears of an existing supply shortage. OPEC will hold a joint ministerial meeting today to assess market conditions and members’ compliance with production targets, with current production policies expected to remain unchanged.

Asian markets were predominantly up yesterday. Japan’s Nikkei 225 (JP225) rose by 0.09%, China’s FTSE China A50 (CHA50) was down 0.21%, Hong Kong’s Hang Seng (HK50) jumped by 2.36% on Tuesday, and Australia’s ASX 200 (AU200) was negative 0.11%. The Hang Seng Index (HK50) today pulled back from a near 3-week peak reached in the previous session as fears intensified after a powerful earthquake struck Taiwan this morning, collapsing at least 26 buildings and injuring 56 people. In China, some railroad tracks were reportedly closed.

Core inflation in Japan’s capital slowed in March, and factory output unexpectedly fell in the previous month, adding uncertainty over how soon the Bank of Japan could raise interest rates again after emerging from negative interest rates. Several weak signs in the economy may encourage the central bank to hold off on another rate hike and give investors a reason to keep selling the yen, putting pressure on the Japanese authorities to intervene in the market to support the currency.

S&P 500 (US500) 5,205.81 −37.96 (−0.72%)

Dow Jones (US30) 39,170.24 −396.61 (−1.00%)

DAX (DE40) 18,283.13 −209.36 (−1.13%)

FTSE 100 (UK100) 7,935.09 −17.53 (−0.22%)

USD Index 104.97 +0.43 (+0.41%)

• – Japan Services PMI (m/m) at 03:30 (GMT+3);
• – China Caixin Services PMI (m/m) at 04:45 (GMT+3);
• – Eurozone Consumer Price Index (m/m) PMI at 12:00 (GMT+3);
• – OPEC Meeting (m/m) at 12:15 (GMT+3);
• – US ADP Nonfarm Employment Change (m/m) at 15:15 (GMT+3);
• – US ISM Services PMI (m/m) at 17:00 (GMT+3);
• – US Crude Oil Reserves (w/w) at 17:30 (GMT+3);
• – US Fed Chair Powell Speaks at 19:10 (GMT+3).

By JustMarkets

This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.

By JustMarkets

At the end of the day yesterday, the Dow Jones (US30) index decreased by 0.60%, while the S&P 500 (US500) Index fell 0.20%. The NASDAQ Technology Index (US100) closed positive 0.11%. Stocks on Monday initially found support on the dovish PCE price deflator report for February released last Friday. But the broader market gave up early gains after bond yields jumped on the back of a stronger-than-expected US ISM manufacturing index. The report was hawkish for Fed policy and could delay an expected Fed rate cut. Meanwhile, strong chip maker stocks raised tech stocks on Monday and kept the NASDAQ Index (US100) in positive territory.

Alphabet (GOOGL) closed at a record high (+3%) after agreeing to delete web browsing data collected from users of its Chrome browser to settle a class action lawsuit that alleged the company tracked people without their knowledge.

In Canada, the S&P manufacturing PMI remained relatively stable in March, marking the eleventh consecutive month of contraction in activity in the sector. However, crude oil prices supported the loonie, helped by the prospect of foreign exchange inflows from Canada’s top exports.

Equity markets in Europe did not trade yesterday due to the Easter holiday.

WTI crude oil prices are trading near 5-month highs at 83 dollars per barrel as investors await the joint OPEC+ ministerial meeting this week. OPEC+ has pledged to extend production cuts through June, which could lead to supply cuts during the summer months in the Northern Hemisphere.

US natural gas prices rose more than 4% on Monday to above $1.8/mmbtu amid continued production declines and forecasts that demand next week will be higher than previously expected. Gas production declined to an average of 100.8 billion cubic feet per day (bcfd) in March, down from 104.8 bcfd in February, as several energy companies, including EQT and Chesapeake Energy, postponed well completions and curtailed other drilling activity.

Asian markets were mostly up yesterday. Japan’s Nikkei 225 (JP225) was down 1.40%, China’s FTSE China A50 (CHA50) was up 1.54%, Hong Kong’s Hang Seng (HK50) was up 0.91% by Monday’s close, and Australia’s ASX 200 (AU200) was positive 0.99%. Optimism about the Chinese economy is supporting equities after the Caixin Mar China Manufacturing PMI rose by 0.2 to 51.1, the highest level in 13 months, and surpassed the 50.0 mark, which indicates the economy is expanding for the fifth month, the longest streak in more than two years.

Australia’s stock market fell by 0.11% on Tuesday after briefly hitting another record high in the morning session. This was led by a drop in US futures as sentiment on US interest rates may shift to a hawkish path amid a resilient economy. In Australia’s domestic market, job advertisements fell for the second straight month in March, while minutes from the central bank’s meeting last month showed policymakers can neither rule in nor rule out future monetary rate changes as uncertainty in the domestic economy persists. In addition, the politicians noted that concerns about the outlook for steel demand have impacted iron ore prices, reducing the earnings of Australian exporters.

S&P 500 (US500) 5,243.77 −10.58 (−0.20%)

Dow Jones (US30) 39,566.85 −240.52 (−0.60%)

DAX (DE40) 18,492.49 0 (0%)

FTSE 100 (UK100) 7,952.62 0 (0%)

USD Index 104.97 +0.43 (+0.41%)

• – Australia RBA Monetary Policy Meeting Minutes at 03:30 (GMT+3);
• – Switzerland Retail Sales (m/m) at 09:30 (GMT+3);
• – Switzerland Manufacturing PMI (m/m) at 10:30 (GMT+3);
• – German Manufacturing PMI (m/m) at 10:55 (GMT+3);
• – Eurozone Manufacturing PMI (m/m) at 11:00 (GMT+3);
• – UK Manufacturing PMI (m/m) at 11:30 (GMT+3);
• – German Consumer Price Index (m/m) at 15:00 (GMT+3);
• – US JOLTs Job Openings (m/m) at 17:00 (GMT+3).

By JustMarkets

This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.

By JustMarkets

At the end of last trading week, the Dow Jones Index (US30) was up 0.08%, while the S&P 500 Index (US500) was up 0.23%. The NASDAQ Technology Index (US100) closed negative 0.05%.

The dollar index settled at 104.5 in post-holiday trading on Monday. Investors are digesting the latest PCE Price Index report, searching for clues about the Federal Reserve’s future monetary policy. Data released on Friday showed that the Fed’s recommended inflation rate rose by 0.3% month-on-month in February, slowing from an upwardly revised 0.4% increase in January, which was also in line with the consensus predicted. The report also showed that consumer spending last month rose by the most in a year, indicating the economy is resilient. Meanwhile, Fed Chairman Jerome Powell reiterated on Friday that the central bank is in no rush to cut interest rates and that the latest PCE inflation data aligns with what the Fed wants. Markets now believe there is a nearly 70% chance that the Fed will start cutting rates in June, with a total rate cut of 75 basis points this year.

Equity markets in Europe mostly went up last week. Germany’s DAX (DE40) increased by 1.75%, France’s CAC 40 (FR40) gained 0.69%, Spain’s IBEX 35 (ES35) jumped by 2.01%, and the UK’s FTSE 100 (UK100) closed positive 0.89%.

The UK economy remains weak, and rate cuts will be welcomed across sectors. The latest ONS data showed that the UK economy entered a technical recession in Q4 2023. The Spring Budget is forecast to boost GDP by around a quarter of one percentage point, but domestic growth needs more stimulus. Against this economic backdrop, the economy needs stimulus, with inflation falling rapidly and the labor market stagnant or marginally weaker. Therefore, the Bank of England has every reason to plan for a series of rate cuts this year, starting with its June 20 meeting.

According to the latest forecasts from ECB staff, Eurozone inflation will continue to fall in the coming months and quarters. With price pressures easing rapidly, the European Central Bank has additional certainty and flexibility regarding the timing of the first interest rate cut. Financial markets certainly believe this is the most likely scenario, which will put pressure on the euro in the weeks and months ahead.

Gold rose above $2,250 an ounce on Monday, extending its rally to record levels. Softer-than-expected US inflation data bolstered bets that the Federal Reserve will begin cutting interest rates in June. Lower interest rates reduce the opportunity cost of holding bullion, increasing its investment value.

WTI crude oil prices rose to around $83.5 a barrel on Monday, hitting their highest level in five months, as investors look ahead to this week’s joint OPEC+ ministerial meeting. The group is expected to review market fundamentals and OPEC representatives’ adherence to production targets, which will continue to support oil prices.

Asian markets traded flat last week. Japan’s Nikkei 225 (JP225) declined by 1.05%, China’s FTSE China A50 (CHA50) gained 0.05% over 5 trading days, Hong Kong’s Hang Seng (HK50) fell by 0.35% last week, and Australia’s ASX 200 (AU200) was positive 1.48%.

Asian stock markets were mixed on Monday as investors assessed several regional economic reports. A private survey showed that China’s manufacturing activity in March grew rapidly since February 2023 amid robust demand. Meanwhile, the Bank of Japan’s quarterly Tankan survey showed that sentiment among large manufacturers in Japan declined in Q1 for the first time in a year as automobile plant closures over the past few months took a heavy toll.

Indonesia’s annual inflation rate rose to 3.05% in March 2024 from 2.75% in February, beating expectations of 2.91%, above the BI (Bank Indonesia) target range of 1.5 to 3.5%. It was the highest inflation rate since August last year, with food prices rising the most in 18 months amid fasting in Ramadan and ahead of the Eid-el-Fitr holiday.

S&P 500 (US500) 5,254.35 0 (0%)

Dow Jones (US30) 39,807.37 0 (0%)

DAX (DE40) 18,492.49 0 (0%)

FTSE 100 (UK100) 7,952.62 0 (0%)

USD Index 104.49 -0.06 (-0.06%)

• – Japan Tankan Large Manufacturers Index (q/q) at 02:50 (GMT+3);
• – Japan Tankan Large Non-Manufacturers Index (q/q) at 02:50 (GMT+3);
• – Japan Manufacturing PMI (m/m) at 03:30 (GMT+3);
• – China Caixin Manufacturing PMI (m/m) at 04:45 (GMT+3);
• – Canada Manufacturing PMI (m/m) at 16:30 (GMT+3);
• – US ISM Manufacturing PMI (m/m) at 17:00 (GMT+3);
• – Canada BoC Business Outlook Survey at 17:30 (GMT+3).

By JustMarkets

This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.

By JustMarkets

As of Wednesday’s stock market close, the Dow Jones Index (US30) was up 0.12%. The S&P 500 Index (US500) added 0.11%, setting an all-time high. The NASDAQ Technology Index (US100) closed negative 0.14%. Stocks received some support from Thursday’s upwardly revised fourth-quarter GDP report. In contrast, the core PCE price deflator was revised downward, reinforcing the prospect of a soft landing for the economy. However, hawkish comments from Fed spokesman Waller on Wednesday night pushed bond yields higher and capped gains in stocks when he said the latest inflation data was disappointing and he wanted to see at least a couple of months of better inflation data before cutting interest rates.

US weekly initial jobless claims unexpectedly fell by 2,000 to 210,000, indicating a stronger labor market than expectations of a rise to 212,000. US GDP for Q4 was revised upward to 3.4% (QoQ), which is stronger than expectations of 3.2%, and Personal Consumption for Q4 was revised upward to 3.3%, which is stronger than expectations of 3.0%. US home sales for February rose by 1.6 % mom, slightly stronger than expectations of 1.5% mom. The March University of Michigan Consumer Sentiment Index was revised upward to a 2-year high of 79.4, stronger than expectations of 76.5.

Although most financial markets are closed today, the PCE Price Index report will be released in the US. The overall PCE Price Index is expected to remain at a 2.4% annualized rate. The Core Price Index (which excludes food and energy prices) is forecast at 2.7% y/y from the current 2.8%. If the Core PCE Price Index remains around 2.8%, it would confirm the Fed’s hypothesis that progress on the inflation front has stalled. In such a scenario, the dollar index may get additional support.

Equity markets in Europe mostly rose on Thursday. Germany’s DAX (DE40) rose by 0.08%, France’s CAC 40 (FR40) closed up 0.01%, Spain’s IBEX 35 (ES35) fell by 0.33%, and the UK’s FTSE 100 (UK100) closed positive 0.26%.

Thursday’s Eurozone money supply report and German retail sales report for February proved dovish for ECB policy and supported European indices. In addition, indices rose due to dovish comments from ECB Governing Council representatives Panetta and Villeroy de Galhau, who said that conditions for monetary easing are emerging and rate cuts should start in the spring. Swaps estimate the odds of a 25 bps ECB rate cut at 11% at the next meeting on April 11 and 95% at the June 6 meeting.

Gold (XAU/USD) held above $2,230 an ounce on Friday, sitting at all-time highs amid bets that major central banks will move to cut interest rates this year. Heated geopolitical tensions boosted bullion demand. The metal’s price rose more than 9% in March. Silver (XAG/USD) gained support on Thursday after the US fourth-quarter GDP data was revised slightly higher, which was a positive for industrial metals demand.

WTI crude oil prices rose above $82 per barrel on Thursday, marking the third consecutive monthly rise. This was driven by optimism over the OPEC+ alliance’s continued production cuts. Despite rising geopolitical tensions that could disrupt supplies, OPEC+ is expected to maintain its current oil production policy at its meeting next Wednesday.

Asian markets traded flat yesterday. Japan’s Nikkei 225 (JP225) was down 1.46%, China’s FTSE China A50 (CHA50) lost 0.90%, Hong Kong’s Hang Seng (HK50) added 0.91% on the day and Australia’s ASX 200 (AU200) was positive 0.99%.

The offshore yuan weakened to 7.26 per dollar, near its lowest level in four months, amid expectations that China will further ease policy to stimulate growth. Meanwhile, US interest rates may remain elevated for an extended period amid stagnant inflation. A senior central bank official recently said the People’s Bank of China has room to further reduce banks’ reserve requirement ratios.

S&P 500 (US500) 5,254.35 +5.86 (+0.11%)

Dow Jones (US30) 39,807.37 +47.29 (+0.12%)

DAX (DE40) 18,492.49 +15.40 (+0.083%)

FTSE 100 (UK100) 7,952.62 +20.64 (+0.26%)

USD Index 104.53 +0.19 (+0.18%)

• – Japan Tokyo Core CPI (m/m) at 01:30 (GMT+2);
• – Japan Unemployment Rate (m/m) at 02:30 (GMT+2);
• – Japan Industrial Production (m/m) at 02:50 (GMT+2);
• – Japan Retail Sales (m/m) at 02:50 (GMT+2);
• – US Core PCE Price Index (m/m) at 15:30 (GMT+2);
• – US FOMC Member Daly Speaks at 17:20 (GMT+2);
• – US Fed Chair Powell Speaks at 17:30 (GMT+2).

By JustMarkets

This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.