MARKET REPORT

Review:
– Traders waiting on PPI and Retail Sales data

– Nvidia -1.1% post 7.2% surge
– Wells Fargo downgrades Tesla, shares down 4.5%
– SI up 3.5%
– Spanish IBEX closes at highest level since 2018, STOXX 50 23yr high, STOXX 600/CAC both record
– FTSE closes 10 month high

– Japan’s Space one rocket (1st private sector rocket explodes after takeoff
– Tick Tok Divestment Bill passes.
– More BoJ sources point to March hike
– Russian oil facilities hit by Ukraine
– Biden against US Steel deal

– Bullish US inventory data
– Strong 30yr bond auction
– Dollar flat, Tech down, crude up SI up, GC flat.
– Crypto Bounce back, again. Money into Fund = must be parked.

DOLLAR DX: UNCH: 102.80           UNCH (102.63 – 103.15) Off lows
– AUD up small: 66.21                    +0.25% (66.61 – 65.90) Mid Rge
– EUR down small: 91.31               -0.2% (91.10 – 91.69) Off lows
– GBP UNCH: 127.97                       UNCH (128.79 – 127.49) Mid
– JPY UNCH: 147.80                         UNCH (146.50 – 148.00) Highs

GOLD up small:                               $2178 +0.5% ($2199 – $2158) Mid
DOW/ES/ND:                                    39090 UNCH, 5170 UNCH, 18090 -0.7%
CRYPTO: BTC/ETH:                          +2050/+2.9% 73050, +33/+0.8% 3988
CRUDE Up: $79.60                          +2.6%/$2.04 ($77.00 – $79.86) Highs

Upcoming:

 US PPI, Retail Sales

FRIDAY:
Industrial Production (Feb), Import Prices (Feb), and Empire survey (March) all on Friday. Globally, we get a JPY 1tln 20yr JGB auction on Thursday, then both the PBoC MLF and Japanese Rengo first tally of wages.

Speakers:

ECB’s Elderson, Schnabel, Knot, de Guindos

Earnings: Dollar General, RWE, Rheinmetall.

MAJORS:

DX:  
Marginal weakness on Wednesday with little data to drive price action. The buck pushed to lows after a strong 30yr Treasury auction which took yields off lows, seeing the Dollar Index briefly break beneath the Tuesday low of 102.72. Analysts at ING suggest the Dollar is starting to look cheap in the short term and suspect there is some room for a rebound in the greenback by the end of the week. Attention turns to the Retail Sales, Jobless Claims, and PPI data on Thursday.

DOLLAR DX: UNCH: 102.80           UNCH (102.63 – 103.15) Off lows

No call Pre PPI/Retail Sales

10 –

AUD:
Aussie the outperformer of the majors.

AUD up small: 66.21                       +0.25% (66.61 – 65.90) Mid Rge

No call Pre PPI/Retail Sales

6

GBP
Marginal gains the the Dollar with Cable trading either side of 1.2800 but it failed to match the strength of the Euro, with EUR/GBP rising above 0.8550. UK GDP rose 0.2% M/M, in line with expectations, although the 3M/3M rolling measure continued to contract, but at a lower pace of -0.1% from -0.3%, suggesting the trajectory for the UK appears to be one of a return to growth after the H2 23 technical recession.

GBP UNCH: 127.97                         UNCH (128.79 – 127.49) Mid

No call Pre PPI/Retail Sales

12-

EUR
Decent gains vs the Dollar, managing to break above the Tuesday high of 1.0948.
The ECB released its operational framework review but it sparked little reaction. In summation the Minimum Reserve Requirements will remain unchanged at 1% (exp. 1-2%), while the spread between the rate on the MROs (Main Refinancing Operations) and DFR (Deposit Facility Rate) is to be reduced to 15bps from 50bps previously, taking effect in September by adjusting the MRO rate. The MLF (marginal lending facility) will also be adjusted to maintain the MRO-MLF spread at 25bps. Note, Goldman Sachs stated that the decisions are technical in nature and see no implications for the monetary policy outlook.

ECB speak, Villeroy said the ECB is winning the inflation battle, but said cuts are more likely appropriate in June than April. Kazaks said a rate cut decision will come in the next few meetings. Wunsch said the ECB can act before wage inflation drops to 3%.

EUR down small: 91.31   -0.2% (91.10 – 91.69) Off lows

No call Pre PPI/Retail Sales

9-

YEN:
Ultimately flat vs the buck but did see weakness where USD/JPY tested 148.00 at the peaks.

More source reports from Reuters suggest that early signs suggest a strong outcome in the annual wage talks have heightened the chances that the BoJ will end NIRP next week, adding there seems to be enough factors that justify a policy shift – similar was also reported by Nikkei later. Bloomberg sources also reported the BoJ is considering an end to ETF purchases if their price goal is in sight but they are likely to keep buying bonds to keep the market stable and to intervene in the event of a sharp yield upside. Strength in JPY was observed after the US 30yr auction (also at the same time as the aforementioned Nikkei article) which saw US yields pare off highs, supporting the Yen – the Nikkei article added little new information ahead of the BoJ next week.

JPY UNCH: 147.80                           UNCH (146.50 – 148.00) Highs

No call Pre PPI/Retail Sales

1

GOLD & SILVER:
Silver the metal of the day up over 3%, with the yellow metal +0.5%. Silver is now above the psychological $25 level. Gold appears supported by firmer CPI with persistent inflation concerns driving a bid tone. FOMO means a lack of a retrace.

GOLD up small:                               $2178 +0.5% ($2199 – $2158) Mid

No call Pre PPI/Retail Sales

EQUITIES:
US INDEXES:
– SPX -0.19% 5,165
– NDX -0.83% 18,068
– DJI +0.1% 39,043
– RUT +0.3% at 2,072

EUR INDEXES:
– DAX: +0.14% 17,987.00
– FTSE: +0.31% 7,772.17
– CAC: +0.62% 8,137.58
– ES50: +0.35% 5,000.55

SECTORS (S to W): Energy +1.52%, Materials +0.91%, Utilities +0.66%, Financials +0.57%, Industrials +0.24%, Communication Services +0.16%, Consumer Staples +0.13%, Consumer Discretionary -0.11%, Health -0.41%, Real Estate -0.6%, Technology -1.08%

STOCKS
US Steel -12%: US President Biden set to voice concerns over Nippon Steel takeover of US Steel (X), according to FT. Biden set to issue a statement about the takeover before Japanese PM Kishida arrives for a state visit on April 18th.
Intel  –4.5%: Pentagon withdrew from allocating up to USD 2.5bln in chip grants to Intel.
Dollar Tree -14%: EPS and revenue missed alongside taking a USD 1bln+ goodwill impairment charge, as it plans to shut nearly 1,000 stores. Q1 diluted EPS guidance was light of expectations.
Tesla -4.6%: Downgraded at Wells Fargo on price, demand, and valuation concerns
Williams-Sonoma +17%: EPS and revenue topped forecasts and it raised its quarterly dividend 26% alongside announcing a stock buyback authorization of USD 1bln.
McDonald’s -4%: Sees Q1 sales in its international business slightly lower that Q4; continue to deal with impacts of war in the Middle East but are also seeing “a sluggish start” in China this year. In China, business is doing “okay”, but the environment continues to be challenging.

OIL:

WTI (J4) SETTLES USD 2.16 HIGHER AT 79.72/BBL; BRENT (K4) SETTLES USD 2.11 HIGHER AT 84.03/BBL

Oil prices rallied on Wednesday amid Russian facility outages, bullish US energy inventory data, and a softer Dollar. WTI and Brent contracts hit session peaks of USD 79.73/bbl and 84.00/bbl, respectively, settling just beneath. The upside momentum began in the European morning, coming on the heels of a fresh wave of Ukrainian drone attacks on Russian refining facilities, creating a fire at Rosneft’s largest refinery. There were also strong gains in gasoline prices and crack spreads. The energy bid was underscored by the EIA inventory data which saw crude stocks draw 1.5mln bbls and gasoline stocks draw a massive 5.7mln bbls, while distillate stocks built 0.9mln bbls. Oil report courtesy of newssquarwk.

CRUDE Up: $79.60                          +2.6%/$2.04 ($77.00 – $79.86) Highs

BOND YIELDS:

US 1-MO 5.366 -0.001
US 6-MO 5.324 +0.003
US 1-YR 5.043 +0.032
US 5-YR 4.193 +0.038
US 10-YR 4.188 +0.033
US 30-YR 4.341 +0.029

2YR/10YR -0.44

CRYPTO
– Spot BTC ETF Inflows hit 1B+
– IBIT (BlackRock) hit 850m alone
– IBIT holds 196k Coins as of Friday, more than MicroStrategy
– Spot ETF’s could see 220B in inflows in next 3 years (= $280k BTC price/$5.5T Market cap)
– JMP raises Coinbase stock price from $220 to $300

CRYPTO: BTC/ETH:                          +2050/+2.9% 73050, +33/+0.8% 3988

No call Pre PPI/Retail Sales

KEEP DOING WHATS WORKING
STOP WHAT ISNT.

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

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