Mr. Chandler sounds weary. How to cheer him up?
I know, a prop bet! Will today's inflation print show a headline number of 1% (or greater) for the single month of March?
From Marc to Market:
Overview: It is a new day, but with the continued rise in interest rates and weaker equities, it feels like yesterday. Only China and Hong Kong among the major markets in Asia Pacific resisted the pull lower. Europe's Stoxx 600 is off by more than 0.5% led by health care and real estate. It is the fourth loss in five sessions and brings the benchmark to its lowest level since March 18. US futures are flattish. Yesterday, the NASDAQ fell by more than 2% for the third session in the past five. The US 2- and 10-year yields are firm at 2.52% and 2.79%, respectively. European benchmark 10-year rates are up 1-2p. The 10-year JGB yield is drawing closer to the 0.25% cap. The greenback continues to draw support from the higher rates. Today, the Australian and New Zealand dollars are resisting. The Swiss franc and Canadian dollar are the weakest. Among emerging markets, the Mexican peso is faring best, up around 0.4%.
Gold is firm and straddling yesterday’s $1953.50 close. June WTI is jumping back after falling to $92.60 yesterday, its lowest level since March 17, to recoup most of yesterday's nearly 4% decline. Europe may be moving toward a ban on Russian oil imports, but a decision is not likely until next month at the earliest and may phase it in over several months. US natgas is rising another 1.2% after surging 5.8% yesterday. It was the third session in five that it rose more than 5%. Europe's natgas benchmark is snapping a three-day drop (~-5.6%) and recouping 1.25%. Iron ore is up 2.5%, its first gain in six sessions. May copper is recovering about half of yesterday's 1.9% decline. July wheat is rising for a third session. It is up almost 3% after rising more than 6% over the past two sessions.
Asia Pacific
Despite the economic costs, Beijing is maintaining its zero-Covid policy. The disruption is weighing on metals and oil prices. However, the economic squeeze may encourage officials to ease efforts to restructure other parts of the economy. This may have been behind the decision to approve the first new video games since last July. China's National Press and Publication Administration published a list of 45 new titles on its website late yesterday. Recall that last August, Chinese regulators introduced measures to cap the playing time for minors.China's Huawei has reportedly furloughed its Russian staff for at least the next month. It suspended new orders. It wants to avoid secondary sanctions from the US. Similarly, Ericsson made a similar decision, suspending its business and putting its local employees on paid leave. While there may be attempts to find a workaround, these kind actions illustrate the power of the threat of secondary sanctions and will have impact over time. At first, inventories will be drawn down, but in a few months, the shortages will become more apparent.
Japan's Finance Minister Suzuki stepped up his warning about yen weakness, saying that officials are closing monitoring the foreign exchange market, "including the recent depreciation of the yen with a sense of vigilance." It produced a small pullback in the dollar, which remains firm, though just shy of the 2015 high (~JPY125.85). With today's move, the greenback has extended its rally for the eighth consecutive session. A convincing break of that old high, and the next important chart area is around JPY130. The Australian dollar found support at $0.7400 is posting minor gains for the first time since last Tuesday. Still, the upticks look vulnerable and may not be sustained after running into offers near $0.7440. A break of the $0.7400 area could spur another leg down toward $0.7320. Note that there is an option at $0.7400 for about A$726 mln that expires today. The US dollar is little changed against the Chinese yuan near CNY6.3700. It has been confined to yesterday's ranges in quiet turnover. The PBOC set the dollar's reference rate at CNY6.3795. The median projection (Bloomberg survey) was for CNY6.3775....
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In other Huawei news, the employee-owned company paid out dividends averaging $75,000 per employee. SCMP:"Huawei pays out US$9.65 billion in dividends to current and retired staff"
