Today most financial markets are closed due to the Good Friday holiday :: InvestMacro

By JustMarkets

As of Wednesday’s stock market close, the Dow Jones Index (US30) was up 0.12%. The S&P 500 Index (US500) added 0.11%, setting an all-time high. The NASDAQ Technology Index (US100) closed negative 0.14%. Stocks received some support from Thursday’s upwardly revised fourth-quarter GDP report. In contrast, the core PCE price deflator was revised downward, reinforcing the prospect of a soft landing for the economy. However, hawkish comments from Fed spokesman Waller on Wednesday night pushed bond yields higher and capped gains in stocks when he said the latest inflation data was disappointing and he wanted to see at least a couple of months of better inflation data before cutting interest rates.

US weekly initial jobless claims unexpectedly fell by 2,000 to 210,000, indicating a stronger labor market than expectations of a rise to 212,000. US GDP for Q4 was revised upward to 3.4% (QoQ), which is stronger than expectations of 3.2%, and Personal Consumption for Q4 was revised upward to 3.3%, which is stronger than expectations of 3.0%. US home sales for February rose by 1.6 % mom, slightly stronger than expectations of 1.5% mom. The March University of Michigan Consumer Sentiment Index was revised upward to a 2-year high of 79.4, stronger than expectations of 76.5.

Although most financial markets are closed today, the PCE Price Index report will be released in the US. The overall PCE Price Index is expected to remain at a 2.4% annualized rate. The Core Price Index (which excludes food and energy prices) is forecast at 2.7% y/y from the current 2.8%. If the Core PCE Price Index remains around 2.8%, it would confirm the Fed’s hypothesis that progress on the inflation front has stalled. In such a scenario, the dollar index may get additional support.

Equity markets in Europe mostly rose on Thursday. Germany’s DAX (DE40) rose by 0.08%, France’s CAC 40 (FR40) closed up 0.01%, Spain’s IBEX 35 (ES35) fell by 0.33%, and the UK’s FTSE 100 (UK100) closed positive 0.26%.

Thursday’s Eurozone money supply report and German retail sales report for February proved dovish for ECB policy and supported European indices. In addition, indices rose due to dovish comments from ECB Governing Council representatives Panetta and Villeroy de Galhau, who said that conditions for monetary easing are emerging and rate cuts should start in the spring. Swaps estimate the odds of a 25 bps ECB rate cut at 11% at the next meeting on April 11 and 95% at the June 6 meeting.

Gold (XAU/USD) held above $2,230 an ounce on Friday, sitting at all-time highs amid bets that major central banks will move to cut interest rates this year. Heated geopolitical tensions boosted bullion demand. The metal’s price rose more than 9% in March. Silver (XAG/USD) gained support on Thursday after the US fourth-quarter GDP data was revised slightly higher, which was a positive for industrial metals demand.

WTI crude oil prices rose above $82 per barrel on Thursday, marking the third consecutive monthly rise. This was driven by optimism over the OPEC+ alliance’s continued production cuts. Despite rising geopolitical tensions that could disrupt supplies, OPEC+ is expected to maintain its current oil production policy at its meeting next Wednesday.

Asian markets traded flat yesterday. Japan’s Nikkei 225 (JP225) was down 1.46%, China’s FTSE China A50 (CHA50) lost 0.90%, Hong Kong’s Hang Seng (HK50) added 0.91% on the day and Australia’s ASX 200 (AU200) was positive 0.99%.

The offshore yuan weakened to 7.26 per dollar, near its lowest level in four months, amid expectations that China will further ease policy to stimulate growth. Meanwhile, US interest rates may remain elevated for an extended period amid stagnant inflation. A senior central bank official recently said the People’s Bank of China has room to further reduce banks’ reserve requirement ratios.

S&P 500 (US500) 5,254.35 +5.86 (+0.11%)

Dow Jones (US30) 39,807.37 +47.29 (+0.12%)

DAX (DE40) 18,492.49 +15.40 (+0.083%)

FTSE 100 (UK100) 7,952.62 +20.64 (+0.26%)

USD Index 104.53 +0.19 (+0.18%)

Important events today:

• – Japan Tokyo Core CPI (m/m) at 01:30 (GMT+2);
• – Japan Unemployment Rate (m/m) at 02:30 (GMT+2);
• – Japan Industrial Production (m/m) at 02:50 (GMT+2);
• – Japan Retail Sales (m/m) at 02:50 (GMT+2);
• – US Core PCE Price Index (m/m) at 15:30 (GMT+2);
• – US FOMC Member Daly Speaks at 17:20 (GMT+2);
• – US Fed Chair Powell Speaks at 17:30 (GMT+2).

By JustMarkets

This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.