MARKET REPORT

– Lyon Stock Exchange. The oldest French exchange is in Lyon, not Paris. Est 1540

– US UoM revised up from prelim
– US Durable Goods Rise +0.7% vs Exp -0.8%
– US Fed’s Waller has not changed his view that the neutral rate is relatively low

– The odds for an ease in December rose and now stand about 82%

– Japan’s Kanda said excessive FX moves are undesirable; Mixed Japanese inflation; Weak UK retail sales

– TSLA to cut Model Y output at Shanghai plant

UK Conservatives are looking at a thrashing (people voted for Brexit to stop immigration, 2023 net +600k, thanks for doing the exact opposite of what you were voted in for):

– US LONG WEEKEND (Memorial day), UK SHUT AS WELL

– Dollar down, Crude bounce, BTC/ETH spread retrace, Tech leads Equities, Silver holds above $30.

DOLLAR DX down: 104.64             -0.4% (105.04 – 104.55) Off LOWS
– AUD up: 66.29                               +0.34% (65.93 – 66.37) HIGHS
– EUR down: 92.14                          -0.3% (92.52 – 92.07) LOWS
– GBP up: 127.37                             +0.32% (126.82 – 127.50) Off HIGHS
– JPY UNCH: 156.94                         UNCH (157.12 – 156.82) MID

GOLD UNCH: $2334                        UNCH ($2348 – $2331) LOWS
DOW/ES/ND UNCH/up/up:          39143 UNCH, 5317 +0.6%, 18865 +0.9%
CRYPTO: BTC/ETH up:                    +3.5% 69092 , down 3741 +1.5%
CRUDE up: $77.75                           +1.14% ($76.15 – $78.03) Off Highs

Upcoming:

US LONG WEEKEND (Memorial day), UK SHUT

Week Ahead:

– Inflation data from the US, Eurozone, Australia and Tokyo are the highlights

Speakers:

EARNINGS:

MAJORS:

DX:
Durable Goods exceeded expectations, with Final the UoM headline revised higher to 69.1 (prev. 67.4, exp. 67.5), as were Expectations and Conditions. The 1yr and 5-10yr inflation expectations encouragingly were revised lower from the prelim survey to 3.3% (prev. 3.5%) and 3.0% (prev. 3.1%), respectively.

Fed speak was light, with only Waller (2024, voter) speaking on R, or neutral rate, and while he primarily provided an academic speech and did not speak on monetary policy or the economic outlook he did provide potential reasons which could see a rise in R, and what has driven it lower for the past forty years, but he said his view has not changed that the neutral rate is relatively low.

Looking ahead, Core PCE is the key highlight next week, alongside the 2nd estimate of GDP and a plethora of Fed speakers.

DOLLAR DX down: 104.64             -0.4% (105.04 – 104.55) Off LOWS

No call

EUR:
Price action this week has largely been at the whim of the USD with Thursday’s EZ PMI data overshadowed by the equivalent US release. This may remain the case until the release of next Friday’s EZ CPI metrics. Once again there was a deluge of ECB speak, but little new was added.

EUR down: 92.14                            -0.3% (92.52 – 92.07) LOWS

No call

AUD:
AUD/USD was unable to launch much of a recovery from recent losses which have seen the pair pullback from a 0.6709 high at the start of the week to a 0.6593 low on Friday.

AUD up: 66.29                                 +0.34% (65.93 – 66.37) HIGHS

GBP
The Pound managed to reclaim some of Thursday’s PMI-induced downside, albeit was initially hit in the UK morning on dismal Retail Sales data, which fell 2.4% (exp. -0.4%, prev. -0.2%), and saw Cable fall to a low of 1.2680. However, after the Greenback selling Cable managed to reclaim 1.2750, albeit briefly.

GBP up: 127.37                 +0.32% (126.82 – 127.50) Off HIGHS

YEN:
Mixed Japanese inflation metrics overnight which warrant a cautious stance from the BoJ and an unchanged rate at the June meeting. Diplomat Kanda told G7 that excessive and speculative FX moves are undesirable and requiring monitoring, and that Japan is ready to take appropriate action if FX markets see excessive moves.

JPY UNCH: 156.94                           UNCH (157.12 – 156.82) MID

No call

GOLD/SILVER
Muted session with the Yellow stabilizing after previous two sessions brutal sell-offs (back of no cuts) with the only notable SI holding above the now Key $30/o level

GOLD UNCH: $2334                        UNCH ($2348 – $2331) LOWS

EQUITIES:

US INDEXES:
– SPX +0.70% 5,304
– NDX +0.99% 18,808
– DJIA +0.01% 39,069
– RUT +1.04% 2,069

EUR INDEXES:
– DAX: +0.02% 18,694.42
– FTSE: -0.26% 8,317.59, CAC: -0.09% 8,094.97
– ES50: -0.02% 5,036.35
– IBEX35: -0.58% 11,246.00

SECTORS (W to S): Communication Services +1.29%, Technology +1.13%, Utilities +0.99%, Materials +0.88%, Consumer Discretionary +0.75%, Financials +0.68%, Industrials +0.55%, Consumer Staples +0.23%, Energy +0.13%, Real Estate +0.02%, Health -0.31%

STOCKS
Nvidia +2.5%: Cuts China prices as it competes with Huawei.
Tesla +3%: To cut Model Y output at Shanghai plant by at least 20% during March-June 2024, according to Reuters citing sources.

OIL:
WTI (N4) SETTLED USD 0.85 HIGHER AT 77.72/BBL; BRENT (N4) SETTLED USD 0.76 HIGHER AT 82.12/BBL

The crude complex was firmer on Friday with a weaker Dollar after soft UoM inflation expectations supporting the move, albeit the upside was not enough to pare the weakness throughout the week. WTI and Brent were already on the front foot pre-data, but the soft inflation expectation metrics just aided the furore higher as oil attempted to recoup some its weekly losses as markets worry about demand and react to a lack of geopolitical escalation. As such, oil continued to extend through the US afternoon to settle just off highs. Nonetheless, energy specific catalysts were light although the OPEC+ meeting was pushed back one day to 2nd June, and Energy Intel’s Bakr said it is expected to be smooth. Elsewhere, in the weekly Baker Hughes rig count, oil was unchanged at 497, nat gas down 4 to 99, leaving the total declining 4 to 600. Oil report courtesy of newsquark.

CRUDE up: $77.75                           +1.14% ($76.15 – $78.03) Off Highs

BOND YIELDS:

US 1-MO 5.37 +0.009
US 6-MO 5.389 -0.001
US 1-YR 5.211 +0.008
US 5-YR 4.528 +0.002
US 10-YR 4.467 -0.008
US 30-YR 4.573 -0.007

2YR/10YR -0.48

CRYPTO
New funds focused on cryptocurrency strategies are opening shop at a much faster pace as hype returns to the market on the back of new ETFs dedicated to the asset class

The first three months of the year saw 25 new venture-capital and hedge funds launched, the most since the second quarter of 2021, according to Crypto Fund Research. That’s double the number that closed during the same period and almost triple the nine funds that emerged in the first quarter of 2023. Last year, the number of new crypto funds barely exceeded the number of closures after the asset class was left in tatters by a bear market.

The total crypto-dedicated hedge-fund market has grown from $16.3 billion in December to reach $21 billion for the first time since October 2022, according to tracker Galaxy VisionTrack.

On the venture-capital side, new fund raises tend to be smaller than in 2021 and 2022, for example, because there are fewer investors new to the space. In the first quarter, only $2.62 billion was invested across 631 VC deals, according to VisionTrack. That’s less than the $2.9 billion invested across 781 deals in the same year-ago period, and a fraction of the $7.2 billion that was invested across 817 deals in the first quarter of 2021.

CRYPTO: BTC/ETH up:                    +3.5% 69092 , down 3741 +1.5%

KEEP DOING WHATS WORKING
STOP WHAT ISNT.

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

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