MARKET REPORT
Review:
– Every single CPI metric coming in hotter than expected
– MoM Act 3.5% Mar vs 3.4% Exp Prev 3.2% Feb
– Shelter and Gas main drivers
– YoY Act 3.8% Mar vs 3.7% Exp Prev 3.8%
– ““Anyone say HOT CPI PRINT TOMORROW!?!?!?”” Yest Mkt Report.
“The so-called ‘Super-core’ CPI measure – services excluding rents – jumped from 3.9% y/y in February to 4.8% in March. This latter metric is heading the wrong way and quite quickly at that.” Brian Coulton, chief economist at Fitch
– June rate cut odds plummet
– Dollar Surges (+1%) to 21-week high, Yen hits 34yr high, Equities SOLD, Gold and Crypto sold but rally post, Treasury Yields SOAR
2024 rate cur expectations, now less than 2 Expected 1 priced in with 50% chance of 2nd):
– June cut NOW OFF THE TABLE ENTIRELY
– FED MINUTES:
– Fed Officials concerned inflation might have stalled and a longer period of tight monetary policy may be required. “Participants generally noted their uncertainty about the persistence of high inflations and expressed the view that recent data had not increased their confidence that inflation was moving sustainably down to 2%”
– This is the minutes from PRE TODAYS CPI
– CAD Leaves rates UNCH (5%, no cut)
– Euro stocks hit 4 week low
– ECB Rate call tomorrow (Exp UNCH)
– Crude jumps on Iran missile strike fears, Israel vows to hit Iranian territory in response.
– Meta debuts new generation of AI chip
– Hamas Leaders children killed in Israeli airstrike.
PRICES at 3.30PM EST
DOLLAR DX UP: 105.00 +1.05% (103.78 – 105.08) HIGHS
– AUD DOWN: 65.09 -1.8% (66.27 – 65.00) LOWS
– EUR UP: 93.06 +1.05% (92.00 – 93.18) HIGHS
– GBP DOWN: 125.36 -1.08% (127.04 – 125.21) LOWS
– JPY UP: 152.94 +0.8% (151.70 – 152.97) HIGHS
GOLD down: $2 -0.7% (2376 – 2338) Off Lows
DOW/ES/ND DOWN: 38700 -500/-1.25%, 5205 -52/-1%, 18185 -170/-0.8%
CRYPTO up: BTC/ETH: BTC +425/+0.6% 69540, ETH UNCH 3505
CRUDE up: $86.28 +$1.06/1.24%
Upcoming:
CHI Inflation
ECB RATE DECISION (EXP UNCH IE NO CUT)
US PPI
ECB Press Conference
CHI Bal of Trade
JAP: Industrial Production
Speakers:
US Fed: Williams, Collins, Bostic
BoE: Greene
MAJORS:
DX:
Obvious story of the day was CPI. As above, a hot number saw Treasury yields soar on no IR cut, June is almost certainly off the table and the Dollar was up across all majors in response. Markets are now pricing in one rate cute with only a 50% chance of a second. July and Nov. This is down the 3 only weeks ago and 5 called by Goldmans in Feb. Bravo.
Bond Yields (2yr +19bps!)
DOLLAR DX UP: 105.00 +1.05% (103.78 – 105.08) HIGHS
No call before PPI
AUD:
Aussie was one of the worst recipients of the Dollars strength. Down almost 2% on the day and testing the psychological 65 handle. A break likely and a 65 ceiling looking like the near term.
AUD DOWN: 65.09 -1.8% (66.27 – 65.00) LOWS
No call pre PPI
GBP
Same story as above. All majors down across the board vs the Buck on CPI
GBP DOWN: 125.36 -1.08% (127.04 – 125.21) LOWS
No call pre PPI
EUR
ECB IR decision tomorrow!
EUR UP: 93.06 +1.05% (92.00 – 93.18) HIGHS
No call pre ECB
YEN:
Yen hit a 34year high with fears BoJ intervention now imminent, but will only exacerbate fears and Yen weakness.
JPY UP: 152.94 +0.8% (151.70 – 152.97) HIGHS
No call pre PPI
GOLD & SILVER:
Choppy trading saw Puking over CPI with a higher likelihood of IR for the foreseeable and cuts pushed back with funds moving from the yellow metal into Treasuries. Gold did bounce back before getting sold off into the afternoon. $2370 to $2340 to $2370 back to close $2350.
SI enjoyed a huge post number squeeze from lows post CPI from $27.68 to 28.60 before crashing back down to close $27.98, UNCH on the day.
GOLD down: $2350 -0.7%/-$11 ($2376 – $2338) Off Lows
No call pre PPI but this SHOULD provide a short term cap to GC with anything $2350+ a fade to catch an outright ride back to a $2200 handle.
OIL:
Renewed fears of an imminent Iran missile strike and Israel vowing to respond on Iranian soil coupled with a hot economy and soaring gas prices pushed oil back up to recent highs of $86+ as per time of writing.
CRUDE up: $86.28 +$1.06/1.24%
BOND YIELDS:
US 1-MO 5. 376 +0.009
US 6-MO 5.382 +0.066
US 1-YR 5.207 +0.161
US 5-YR 4.604 +0.226
US 10-YR 4.546 +0.18
US 30-YR 4.626 +0.127
2YR/10YR -0.42
CRYPTO
– Hong Kong expected to approve spot BTC ETF’s mid-April
– Uniswap Labs, the initial creator of the largest decentralized exchange on Ethereum, said the US Securities and Exchange Commission has warned the company of a potential enforcement action
– About 22% of US pop owns a share of BTC
CRYPTO up: BTC/ETH: BTC +425/+0.6% 69540, ETH UNCH 3505
KEEP DOING WHATS WORKING
STOP WHAT ISNT.
Best of luck out there. Let the market come to you
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