Economic Indicators & Central Banks:
- A slip in risk appetite and a solid 5-year auction gave Treasuries a little boost yesterday with yields ending modestly lower.
- Profit taking on the strong gains for the quarter, and indeed record highs last week, and some tax loss selling weighed.
- Wall Street ended with small losses. The NASDAQ fell -0.42%, with the S&P500 off -0.28%, while the Dow dipped -0.08%.
- The US consumer confidence undershot assumptions and joined a Michigan sentiment down-tick to 76.5 from 76.9 in February and a 30-month high of 79.0 in January. All the surveys face headwinds from high mortgage rates, tight credit conditions, and recession fears.
- The US durables report slightly beat estimates thanks to a restrained 3.3%.
- Data showed that industrial profits in China jumped 10.2% in the first 2 months of the year, but signs of an ongoing recovery means there is a lower chance of further stimulus. China officials also seem to have tightened their grip on the currency once again.
- Japan officials have also engaged in some verbal intervention over the past week, but that didn’t prevent the Yen from hitting a 34 year low against the Dollar.
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Italy sold about 12.5% of Banca Monte dei Paschi di Siena SpA for about €650 million ($704 million) as part of Giorgia Meloni’s government plan to divest from the bailed-out lender.
Market Trends:
- Today, European stock futures are lower ahead of the ESI economic confidence reading and the 4-day Easter holiday weekend.
- US futures are in demand after a mixed close across Asia.
- The China bourses underperformed, Hang Seng & CSI 300 are down -1.4% and -1.2% respectively.
- Bond yields are slightly lower, with the 10-year Treasury rate down -0.6 bp at 4.23%, and the 10-year JGB rate down -1.5 bp.
- Bunds are outperforming, and the German 10-year rate has corrected -2.6 bp in early trade, as markets expect Spanish HICP numbers to confirm the downtrend in headline inflation.
Financial Markets Performance:
- The USDIndex recovered to close slightly firmer at 104.10. It’s a fourth straight close over 104.
- The Yen is at 34-year low retesting once again the 152 high.
- Gold extended gains as the focus shifts to key US PCE numbers on Friday. Bullion is currently at $2179 after breaching $2200. Geopolitical risk, central bank buying, bond rally and rate cut expectations solidifying, all added to the strength in gold.
- USOIL steady for a 2nd day in a row below $81.00.
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Andria Pichidi
Market Analyst
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