InvestMacro

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.

By JustMarkets

On Wednesday, the US stock indices ended trading with moderate growth. A decline in T-note bond yields supported the broader market. Investors also welcomed reports that S&P Global Ratings maintained its AA+ long-term US sovereign credit rating and A-1+ short-term sovereign credit rating with a stable outlook. As of Wednesday’s stock market close, the Dow Jones Index (US30) increased by 1.22%. The S&P 500 Index (US500) added 0.86%. The NASDAQ Technology Index (US100) closed positive 0.51%.

Merck’s (MRK) stock price rose more than 4% and topped the Dow Jones Industrials Index after its pulmonary arterial hypertension drug Winrevair received approval from the US Food and Drug Administration. Netflix (NFLX) shares closed down more than 2% after Wedbush removed it from its list of best ideas, saying the company will have a “much harder time” impressing investors this year compared to last. According to SEC filings, Salesforce (CRM) closed down more than 1% and topped the Dow Jones Industrials losers list on signs of insider selling after CEO Benioff sold $4.59 million worth of shares on Monday.

Equity markets in Europe were mostly up on Wednesday. Germany’s DAX (DE40) rose by 0.50% and set a new all-time high, France’s CAC 40 (FR40) closed yesterday up 0.25%, Spain’s IBEX 35 (ES35) added 1.09%, and the UK’s FTSE 100 (UK100) closed positive 0.01%. The Euro Stoxx 50 Index (EU50) rose to a 23-year high on Wednesday.

More ECB policymakers are hinting at a rate cut in June. Yesterday, ECB Governing Council representative Kazaks said inflation will continue to fall across the Eurozone, and June could be a good time for the ECB to start lowering borrowing costs. His colleague, ECB executive board representative Cipollone, added that if incoming data confirms the scenario envisioned in the March forecasts, the ECB should be ready to roll back its restrictive monetary policy stance quickly. Currently, swaps are pricing in the odds of a 25 bps ECB rate cut to 13% at the next meeting on April 11 and fully pricing in that rate cut (100%) at the next meeting on June 6.

German retail sales in February 2024 fell by 1.9% month-on-month, falling short of market forecasts that expected a 0.3% increase. This was the fourth consecutive month of decline in retail sales and the sharpest pace since October 2022, reflecting the impact of higher inflation and high borrowing costs.

The UK economy contracted by 0.3% in the final quarter of 2023, entering a technical recession as high inflation, record borrowing costs, and weak external demand put pressure on demand and activity.

WTI crude futures rose to $82 a barrel on Thursday, breaking a two-day decline, as the latest EIA report pointed to a smaller weekly increase in US crude inventories compared to API data. The EIA data showed that US crude inventories rose by 3.165 million barrels last week, beating market expectations for a 1.275 million barrel decline but far less than the 9.337 million barrel increase reported by the API. Investors also highlighted ongoing supply concerns before next week’s OPEC Joint Ministerial Monitoring Committee meeting.

Asian markets traded flat yesterday. Japan’s Nikkei 225 (JP225) rose by 0.90%, China’s FTSE China A50 (CHA50) declined by 0.76%, Hong Kong’s Hang Seng (HK50) lost 1.36% yesterday, while Australia’s ASX 200 (AU200) was positive 0.51%. At the market open on Thursday, Chinese indices bounced off one-month lows amid expectations that Chinese authorities will step up policy support to shore up the economy. On Thursday, Chinese lawmaker Zhao Leji said that the country would continue to open its economy to foreign investors, which boosted market sentiment. Investors are awaiting data on manufacturing and services activity in China in the coming days to gauge the health of the world’s second-largest economy. Meanwhile, Chinese President Xi Jinping met with US business leaders in Beijing on Wednesday as the government seeks to return foreign investors to the country.

The Reserve Bank of South Africa unanimously decided to keep the key repo rate at 8.25%, marking the fifth consecutive meeting at 2009 levels, as expected. Policymakers emphasized that risks to the inflation outlook were generally skewed to the upside. Core inflation accelerated for the second consecutive month, reaching 5.6% in February from January’s 5.3%, nearing the upper end of the central bank’s target range of 3-6%. Inflation is not expected to reach the middle of the target range until the end of 2025, later than previously thought, as it was initially expected to do so by mid-year.

Expectations for Australian consumer inflation fell to 4.3% in March 2024 from 4.5% in February, indicating the lowest level since October 2021 amid signs that domestic price pressures continue to ease. Australian retail sales rose by 0.3% month-on-month in February 2024, slowing sharply from a 1.1% increase in the previous month and below market forecasts of 0.4%. The S&P/ASX 200 Index (AU200) closed at 7,897 on Thursday, hitting new record highs. Mining stocks led the gains amid higher gold, iron ore, and lithium prices. The interest rate-sensitive banking, real estate, and retail sectors also rose as softer-than-expected domestic inflation data bolstered bets for a rate cut in the second half of 2024.

S&P 500 (US500) 5,248.49 +44.91 (+0.86%)

Dow Jones (US30) 39,760.08 +477.75 (+1.22%)

DAX (DE40) 18,477.09 +92.74 (+0.50%)

FTSE 100 (UK100) 7,931.98 +1.02 (+0.01%)

USD Index 104.37 +0.08 (+0.07%)

• – Australia Retail Sales (m/m) at 02:30 (GMT+2);
• – UK GDP (q/q) at 09:00 (GMT+2);
• – Eurozone German Retail Sales (m/m) at 09:00 (GMT+2);
• – Switzerland KOF Leading Indicators (m/m) at 10:00 (GMT+2);
• – Eurozone German Unemployment Rate (m/m) at 10:55 (GMT+2);
• – US GDP (q/q) at 14:30 (GMT+2);
• – Canada GDP (m/m) at 14:30 (GMT+2);
• – US Initial Jobless Claims (w/w) at 14:30 (GMT+2);
• – US Chicago PMI (m/m) at 15:45 (GMT+2);
• – US Michigan Consumer Sentiment (m/m) at 16:00 (GMT+2).
• – US Pending Home Sales (m/m) at 16:00 (GMT+2);
• – US Natural Gas Storage (w/w) at 16:30 (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.

By ForexTime

Article by ForexTime

ForexTime Ltd (FXTM) is an award winning international online forex broker regulated by CySEC 185/12 www.forextime.com