North American News
Closing changes: Big finish to the week as the market hopes for a Fed top
- Closing changes in North America
Daily changes:
- S&P 500 +1.6%
- Nasdaq Comp +2.0%
- DJIA +1.2%
- Russell 2000 +1.3%
Weekly changes:
- S&P 500 +1.9%
- Nasdaq Comp +2.6%
- Russell 2000 2.7%
US February ISM services PMI 55.1 vs 54.5 expected
- US Institute for Supply Management services PMI index for February 2023
- Services PMI index 55.1 versus 54.5 estimate. Prior month 55.2
- employment index 54.0 versus 49.8 expected. Prior 50.0
- new orders index 62.6 versus 58.5 expected. Prior 60.4
- prices paid index 65.6 versus 64.5 expected. Prior 67.8
- new export orders 61.7 versus 59.0 last month
- imports 52.6 versus 53.0 last month
- backlog of orders 52.8 versus 52.9 last month
- inventories 50.6 versus 49.2 last month
- supplier deliveries 47.6 versus 50.0 last month
- inventory sentiment 55.3 versus 55.8 last month
Fed’s Logal: Central bank interventions in Treasuries should be rare
- Logan on market disfunction
- Does not comment on the outlook for monetary policy
- Need to clarify terms of bond buying when done for market support’
Commodities
Gold to struggle near term as Fed set to remain hawkish – ANZ
Gold is likely to track shifting market expectations around the Fed tightening in the short term, according to strategists at ANZ Bank.
USD is likely to weaken in the second half of 2023
“The Gold market remains vulnerable to market expectations around the Fed’s monetary policy. Strong economic data from the US with sticky inflation raise the risk of more rate hikes; this is likely to be a headwind in the short term.”
“Nevertheless, we see limited upside in the USD, which is a tailwind for gold prices. Even with higher terminal rates, the USD is likely to weaken in H2 2023.”
WTI Crude oil settles at $79.68
- up $1.52 or 1.94%
The price of WTI crude futures is settling at $71.68
That is up $1.52 or 1.94%. The high for the day reached $79.73. The low reached down to $75.83. The price action today was influenced by a report earlier in the day that the UAE was contemplating leaving OPEC. That sent the price sharply lower. Later there was a denial which pushed price back to the upside. The price is closing near its highs for the day.
Report on UAE mulling leaving OPEC is ‘far from the truth’ – report
- Report from Reuters
Oil prices bounced back after falling $2 on the initial report about the UAE mulling leaving OPEC and prices have continued higher on this fresh headline from Reuters, which cites ‘a source with direct knowledge of the matter’.
Oil bulls pounce on the dip, sending crude $3 higher
- WTI goes from a $2 loss, to a $1 gain in hours
What a ride for oil bulls today.
It fell $2 in short order on a report that UAE was mulling leaving OPEC. That dip didn’t last long as the dip buyers waded in and the rally was complete when a pair of denials crossed. That might have been a cue for profit taking but crude has stayed strong on optimism about the global economy in the aftermath of the China PMIs this week and today’s ISM services data.
EU News
European equity close: Another hot week as the great year continues
- European stocks posted another great week
On the day:
- Stoxx 600 +1.0%
- German DAX +1.7%
- Francis CAC +1.0%
- UK’s FTSE 100 +0.1%
- Spain’s Ibex +1.5%
- Italy’s FTSE MIB +1.5%
On the week:
- Stoxx 600 +1.4%
- German DAX +2.4%
- Francis CAC +2.2%
- UK’s FTSE 100 +0.9%
- Spain’s Ibex +2.7%
- Italy’s FTSE MIB 3.0%
Other News
Fed semi-annual monetary policy report: Ongoing increases in Fed funds are necessary
- Highlights of the Fed’s monetary policy report
- Financial conditions have tightened significantly since June
- For core services ex-housing sector, inflation remains elevated; prospects for it slowing may depend in part on an easing of tight labor market conditions
- Market liquidity remained low in Treasury and other key markets
- Bringing inflation back to 2% likely requires period of below-trend growth, some softening of labor market conditions
- Underlying momentum in the economy likely remains subdued
- Core foreign inflation remains high and inflation pressures are broad
- Will adjust balance sheet drawdown process if there is a need to
- Tight labor market conditions have largely erased pandemic-induced widening of employment caps across demographic groups
- Labor force participation rate is likely to remain well-below its level from before the pandemic
- Rate hikes have narrowed gap between policy rule settings and real-world level
Cryptocurrency News
Crypto companies behind Tether used falsified documents – report
- Officials go after tether again
It’s a great day for risk assets but crypto is struggling, in a turn of correlations. That’s mostly about the struggles at Silvergate and potential contagion if it collapses but the WSJ is piling on late in the week with a story about Tether intermediaries using fake invoices, false documents and shell companies.
To some extent, the US has been going after Tether for 8 years and hasn’t found a smoking gun. If there was a skeleton in the closet, they would have found it by now. In any case, the company has quickly issued denials saying the story is “wholly inaccurate and misleading”
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