Economic Indicators & Central Banks:
- Rate cut hopes for the US are fading, which is weighing on stock markets. Bonds have found a footing, at least outside of the US, and the 10-year Bund yield is down -1.4 bp, after the 10-year JGB corrected -1.3 bp.
- A rise in February JOLTS, albeit after a downward revision to January, and a better than expected factory report, exacerbated the sell off in longer dated Treasuries.
- Disappointing delivery news from Tesla, along with weakness in the health and retail sectors, weighed on sentiment.
- Rising geopolitical risks boosted Gold and Oil.
- Fed’s Mester(Voter) & Daly (Voter): They still see 3 cuts this year, which helped trim losses. Mester stated that she will not vote for a cut at the May meeting given the lack of sufficient data but said she would not rule out action in June.
- China’s manufacturing activity expanded at the fastest pace in 13 months in March. Yuan declined despite data.
- Today: EU Inflation & Core, US ADP, US ISM Services and Fed Powell speech. OPEC ministerial meeting is also on tap and it is expected to confirm current output cut targets.
Market Trends:
- Wall Street slumped as well on JOLTS and hence the Fed outlook and the rise in yields with the major indexes falling over -1.0% before paring losses. The Dow finished with a -1.0% drop, while the S&P500 was down -0.72% and the NASDAQ -0.95% lower.
- Stocks have sold off across Asia, with Hang Seng and ASX underperforming and losing more than -1%. US futures are also in the red, while European futures are narrowly mixed.
Financial Markets Performance:
- The USDIndex climbed to hit 105.10, but it lost traction and slid to close at 104.52 with a pick up in downside momentum after the Fedspeak. Monday’s 105.019 close was the first with a 105 handle since mid-November.
- The AUD & NZD (often used as liquid proxies for the CNH), are under pressure as a result of a stronger USD and a weaker CNH.
- Gold (+11% this year) surged to a new all-time peak at $2288 even as Fed rate cut bets were pared. Silver hit a 2-year high.
- USOIL was up 1.9% at $85.30 per barrel with additional support from expectations for rising demand.
- Bitcoin at $66.3K, under pressure for a 3rd day in a row.
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Andria Pichidi
Market Analyst
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