MARKET REPORT

Review:
– US consumer confidence strong
– Existing Home Sales beat
– Surprise US crude inventory build
– Harker DOVISH

– UK CPI tumbles
– ECB officials push back on rate cut pricing

– Dollar Up (Excl Yen). AUD 67.30 -0.44% EUR 91.36 0.37% GPB 126.35 -0.74% JPY 143.56 -0.2%
– Gold down $11 $2041 -0.5%
– DOW down 500 -1.2%, ES down 70 -1.5%, ND down -250 -1.4%
– Crypto: BTC Up 1100 43500. ETH Unch.
– Crude UNCH $73.79

Upcoming:
US PCE
– Philly Fed Business Index
– GDP (Final)

– Canadian Retail Sales

– Japanese CPI

MAJORS:

DX:
The tumble in the UK CPI data ramped up not just BoE cut pricing, but also pricing of cuts for its peer, the ECB, with soft German PPI data adding to the latter. Both data firmed the dollar against an (obviously) weaker Pound and to a lessor extent, the Euro (Pound -0.75% Euro -0.37%). This pushed the Index to 102.075, +0.27%.

No call on direction. Expect rangey trading pre PCE. 101.50 – 103 Pre. Cant see, event excluded, much outside of this.

AUD:
AUD firmed slightly vs the dollar at 67.33 (-27 pips/0.4%). Nothing specific just general dollar firmness basis Europe had demand for dollars across the board. Again, expect relatively subdued markets pre PCE.

66.79 – 67.92

EUR:

91 has held multiple times with a little assist this time from the Poms and Ze Germans. Can see muddled trading around 91 until PCE. 91.

90.79 to 91.84 for a retrace to 91 the handle even.

Pound
Pound:
“I expected a little more weakness in the Pound. I got this one wrong. Pound at 127.30.”
Yes Mkt report.

Oh timing you. Great to be right 24 hours early and therefor be wrong. The expected weakness did come, albeit on its own schedule, not mine. As stated above weak UK CPI was the wind assist driving the Pound down more-so than the other majors.

I like anything with a 125 handle pre PCE. Somewhere around 125.60 would be Gold but unlikely to see. Maybe we get into the 70’s for value.  

Yen:
Yen was flat vs the Greenback with some Yen strength seen as stocks tumbled into the closing bell. There was little reaction to a Nikkei article which noted Japanese incomes will rise faster than inflation in FY24, noting per capita income will increase by 3.8% next year on a combination of lower taxes and higher wages.

No call.

Gold and Silver:

Dollar doesn’t want to go up, but the Pound & Its sister want to go down faster. Small dollar bid tone capped Gold and it drifted off $11 to 2041. Nothing major.
PCE will determine where we go from here.
Silver ramped on the open from 24.30 to 24.75 (I said yesterday $25 was on the cards) and if it wasn’t for GC weakness, we would’ve seen it and been through. SI outperformed GC by staying positive on the day closing at 24.45 (+0.5%).

Equities:
– DOW -450/1.2% at 37475
– ES -70/1.4% at 4750
– NQ -230/1.35% at 16800
– DAX -0.07% at 16,733.05
– FTSE 100 +1.02% at 7,715.68
– CAC 40 +0.12% at 7,583.43
– Euro Stoxx 50 -0.03%

US Sectors:
Consumer Staples -2.02%, Utilities -1.98%, Consumer Discretionary -1.74%, Financials -1.72%, Industrials -1.64%, Technology -1.54%, Materials -1.48%, Health -1.46%, Real Estate -1.31%, Energy -0.97%, Communication Services -0.05%.

– Warner Bros. Discovery -6%:     reportedly in talks to merge with Paramount Global -2%, according to Axios citing sources.
FedEx -12%:     Missed on EPS and revenue alongside cutting FY24 revenue growth view. In sympathy, UPS (UPS) -3.3%.
– Salesforce -1%:              Downgraded at Wells Fargo.
– Toyota Motor’s -2%:     Daihatsu unit will halt shipments of all of its vehicles after a safety scandal investigation found issues involving 64 models, incl. almost two dozen sold under Toyota’s brand.
– Winnebago -6%:            Missed on profit, adj. EBITDA, and operating revenue.
– Google +1%:    Plans to reorganize a big part of its ad sales unit as automation booms, The Information reports.
– Union Pacific -2%:         Sees in excess of USD 200mln in goods, wages, and transportation costs lost each day as El Paso and Eagle Pass border crossings remain closed.

Oil
:
Oil prices were ultimately modestly firmer on Wednesday after bearish inventory data unwound the initial bid out of Europe. The upside gained momentum in the European morning with desks pointing to the ongoing Red Sea issues following on from reports late on Tuesday that the US was considering greater military action against Yemen’s Houthis beyond the task force. WTI and Brent futures peaked for the session at USD 75.37/bbl and 80.60/bbl, respectively, in the NY morning. But, the gains faded into the NY afternoon, accentuated by the EIA weekly US inventory data which saw crude stocks build 2.9mln bbls (exp. draw of 2.3mln), with the products also seeing net build of 4.2mln bbls. Elsewhere, Reuters reported Russia’s Rosneft is to discuss possible German assets sale with the German Economy Ministry in Berlin on Friday, where Shell (SHEL LN) and Eni (ENI IM) currently own 37% and 8% in the Schwedt refinery, respectively, and Rosneft’s assets include a 54.2% stake in the Schwedt refinery.
Oil report courtesy of zerohedge.com

Bond Yields:

1 Mo: 5.345 -0.003 6Mo 5.312 -0.029 1yr 4.913 -0.044 5yr 3.851 -0.082 10yr 3.853 -0.069 and the 30yr 3.989 -0.047
2’s/10’s -0.49

Crytpo:
“Still like upward momentum.”
Yest Mkt Report.

BTC: +1300/+3% at 43650. Think will continue. 45k plus stops. Will this move be pre or post PCE, I don’t know. Markets focus IS PCE for clarity on the schizophrenic Fed BABBLE.
ETH: +0.7% ONLY at 2195.

YES there WERE ETF rumors, but finding ‘REASON’S’ for crypto movement is like finding a cookbook where every recipe has under the ingredient’s ‘anything’.

My call is for future strength BUT ALSO to put this spread back on (MAYBE wait until ETH makes up some ground). I think the market is telling us, in a bull mkt (cough hello, remember the grand ol days of 25k?) BTC will OUTPERFORM. My humble opine, both these things, will continue.

Strat: Buy BTC and LEAN on ETH.

When? That’s up to you 😉

Best of luck out there. Let the market come to you.

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