USD drifted, returning end of quarter gains on more signs of slowing in manufacturing activity, which had boosted Treasuries yields but after the data reversed the selloff. Implied Fed funds futures dipping too as the market reduced slightly the risk for a May rate hike. US Stock markets closed higher except US100. European futures are slightly higher. Oil held gains above $80 led by OPEC+ and Saudi’s pledge of its own of 500k reduction (“Saudi First”), which was the main driver across assets.
Overnight: RBA – held rates unchanged VS expectations – The bank has not ruled out a resumption of rate rises in the future. Fed’s Bullard (nonvoter) expects funds rate over 5% to achieve inflation target. ECB hawk Holzmann suggested that another 50 bp hike in May is not out of the question.
- FX – USDIndex sagged to a low of 101.98 on the growth outlook and less hawkish Fed view, but the index finished the day at 102.03. EUR lifted to 1.0916. JPY underperformed as traders weighed in the impact of higher oil prices on Japan’s manufacturing sector. Currently back up to 132.80 amid wider weakness in the Yen. Sterling boosted to 1.2400, amid USD weakness and as UK March manufacturing PMI revised down.
- Stocks – The US30 rallied 0.98%, led by the jump in energy. The US500 was 0.37% in the green, while the US100 slipped -0.27%. Nikkei and ASX managing slight gains, but China bourses trading narrowly mixed. The Hang Seng underperformed after the US100 closed in the red, with the tech sector not benefiting hugely from the more cautious tone of central banks.
- Commodities – USOil – Saudi’s pledge of its own of 500k reduction was the main driver across assets. USOIL ended with a 6.28% pop to $80.42, up over $80 for the first time since March 6 (just before SVB went under), and the contract is up 10% since last Wednesday.
- Gold – at 5-day support, $1976.
- Cryptocurrencies – BTC holds $27.4k.
Today – European PPI, Canadian Building permits, US Jolts and Factory Orders.
Biggest FX Mover @ (07:30 GMT) USDRUB (+5.02%). Rallied to 78.50 this morning. MAs aligned higher, MACD histogram & signal line positive & rising but RSI flat and Stochastic posted a bearish cross. H1 ATR 0.4139, Daily ATR 0.9496.
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Andria Pichidi
Market Analyst
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