Round up of today’s market news

North American News

Stock Markets Extend Losses: NASDAQ and S&P Indexes Slide for Fifth Straight Day

• NASDAQ index down -0.52%

The major stock indices are closing mixed with the Dow industrial average moving higher. The broader S&P and NASDAQ indices closed lower for the fifth consecutive day. The Russell 2000 also moved lower for its fifth day in a row.

A snapshot of the closing levels shows:

• Dow industrial average up 22.07 points or 0.06% at 37775.37
• S&P index down -11.11 points or -0.22% at 5011.11
• NASDAQ index -81.87 points or -0.52% at 15601.50

The small-cap Russell 2000 fell -4.88 points or -0.26% at 1942.95.

Netflix reports revenue of $9.37 billion vs $9.27 billion expected. Shares up 3%

• Highlights of the Netflix quarterly report
• Earnings of $5.28 vs $4.52 estimate
• Streaming paid additions of 9.33m vs 5.11m estimate
• Q2 outlook $4.68 vs $4.54 estimate
• Operating income $2.633B vs $2.428B estimate

“We’re raising our FY24 operating margin forecast to 25%, based on F/X rates as of January ‘24, up from 24,” the company said. They also said they’re “scaling ads to become a more meaningful contributor to our business in ‘25 and beyond.” So we’ll all continue to pay the $15/month and it won’t be long before we get ads with that too.

For Q2’24, they forecast revenue growth of 16%

US treasury auctions $23B of 5 year TIPS at 2.242%

• WI 2.270% at the time of the auction

• High-yield 2.242%
• Tail -2.8 basis points vs six-month average of -0.1 basis points
• Bid to cover 2.58X versus six-month average of 2.45X
• Directs (domestic) 17.8% versus six-month average of 16.5%
• Indirects (international buyers) 78.3% versus six-month average of 76.0%

US initial jobless claims 212K vs 215K estimate

• The weekly US initial and continuing jobless claims

• Prior week initial jobless claims 211K revised to 212K
• initial jobless claims 212K vs 215K estimate
• 4-week moving average of initial jobless claims 214.5K vs 214.5K last week.
• Prior week continuing claims 1.817M revised to 1.810M
• Continuing claims 1.812M vs 1.810M estimate
• 4-week moving average of continuing claims 1.805M vs 1.801M last week.
• The largest increases in initial claims for the week ending April 6 were in New Jersey (+4,339), New York (+2,499), Pennsylvania (+1,783), Texas (+1,523), and Florida (+977),
• The largest decreases were in Iowa (-1,418), California (-631), Ohio (-530), Nevada (-362), and Maryland (-352).

US existing home sales for March 4.19M versus 4.20M estimate

• The US existing home sales for March 2024

• Prior month 4.38M annualized rate
• Existing home sales 4.19 million for March versus 4.20 million estimate
• Existing home sales percentage change -4.3%
• YoY existing home sales fell -3.7%
• Existing home sale price rose 4.8% from March 2023 to $393,500 (up from $375,300 last year). That is the ninth consecutive month of year-over-year price gains in the highest price ever for the month of March
• inventory of unsold homes grew 4.7% from one month ago to 1.11 million for the equivalent of 3.2 month supply at the current monthly sales pace. That is up from 2.9 months last month, and 2.7 months in March 2023.

Other details

• Days on the market 33 versus 38 days
• Investor purchases 15% versus 21%
• First-time buyer 32% versus 26% last month and 28% in March 2023
• SALES accounted for 28% of transactions in March. That is down from 33% in February and up from 27% last year.
• The 30 year fixed-rate mortgage averaged 6.88% as of April 11 up from 6.82% the previous week and 6.27% one year ago

US leading index for March -0.3% versus -0.1% estimate

• US leading index for March 2024

• Prior month +0.1% revised from +0.2%
• leading Index for March -0.3% versus -0.1% estimate

Philly Fed April manufacturing business index +15.5 vs +2.3 expected

• The Philadelphia Fed Business index for April 2024

Philly Fed business index:

• Two-year high
• Prior was +3.2
• Employment: -10.7 vs -9.6 prior
• New orders: +12.2 vs +5.4 prior
• Prices paid: +23.0 vs +3.7 prior
• Prices received: +5.5 vs +4.6 prior
• Shipments: +19.1 vs +11.4 prior
• Unfilled orders: +0.8 vs +1.0 prior
• Delivery times: -9.4 vs -16.7 prior
• Inventories: -8.9 vs +4.4 prior
• Avg employee workweek: -18.7 vs -0.2 prior

Look-ahead indexes:

• Six month index: +34.3 vs 38.6 prior
• Employment: +12.8 vs +5.8 prior
• New orders: +42.8 vs +49.9 prior
• Shipments: +29.3 vs +43.9 prior
• Prices paid: +54.5 vs +38.0 prior
• Prices received: +34.4 vs +37.1 prior

NY Fed Pres. Williams: I don’t feel an urgency to cut rates

• NY Fed Pres. Williams speaking

• I don’t feel an urgency to cut rates.
• It data fed is that data dependent and the datah as been good
• We have a strong economy.
• Economic imbalances have been reduced
• Fed rates haven’t cause the economy to slow too much
• Monetary policy is in a good place.
• Eventually interest rates will need to be lower.
• Rate cuts will be determined by economic activity.
• Fed rate hike are not my baseline forecast.
• If data called for higher rates, Fed would hike
• Fed has work to do to lower inflation.
• Fed 2% inflation goal is the right objective.
• Critical for the Fed to achieve its 2% inflation goal.
• Economy back on pre-pandemic growth track.
• Is watching performance of China’s economy

Atlanta Fed president Bostic: US inflation is too high

• Fed’s Bositic speaking

• US inflation is too high
• We still have a ways to go on inflation.
• I’m comfortable being patient.
• I’m not in a mad dash hurry to get there.
• If we can keep jobs, wages going inflation is moving to target, we can stay where we are on rates.
• I don’t have a recession in my Outlook.
• We won’t be able to reduce rates until towards the end of the year.
• I think the economy will continue to grow as we get both mandates back in the line.

UBS says the US Federal Reserve remains on track to cut rates twice this year

• Most likely starting at its September meeting

UBS (Global Wealth Management) on its outlook for the Federal Open Market Committee (FOMC) and bonds:

• “While we have recently lowered our expectations on the timing and magnitude of Fed rate cuts, we believe the US central bank remains on track to cut rates twice this year, most likely starting at its September meeting.”
• “This means the return outlook for quality bonds remains positive and attractive, and that recent losses in fixed income are likely to be temporary.”
• “We continue to favor quality bonds in our global portfolios and recommend investors lock in attractive yields before rates fall this year.”

Fed’s Mester says inflation is higher than expected, need more confidence on trajectory

• Mester in no hurry to cut the Fed Funds rate

Mester not sounding like an interest rate cut is imminent.

Loretta Mester, president and CEO of Federal Reserve Federal Reserve Bank Cleveland branch, speaking on “An Update From the Federal Reserve”

• We want to get more information before we can say inflation is on a sustainable path to 2%
• This year inflation is a little higher than expected
• We want to be pretty confident inflation is on this downward trajectory
• We have strong labor markets, solid economic growth
• I still expect inflation to come down
• If inflation isn’t moving down to 2% we could keep rates where they are for longer
• At some point we will start to ease policy

• We don’t have to ease policy in a hurry
• Watching risks to both of the Fed’s mandates

Fed’s Bowman says progress on inflation has slowed, perhaps stalled

• Raises the prospect of a future rate hike

Federal Reserve Board Governor Michelle Bowman participates in fireside chat before the Institute for International Finance (IIF) Global Outlook Forum

• Progress on inflation has slowed and perhaps stalled
• Economic conditions are strong
• Strength of consumer spending tied to ongoing job growth
• Current monetary policy is restrictive; time will tell if it is “sufficiently” restrictive
• Consumers may be trading down to lower goods; but also spending large amounts of money on things like travel to see eclipse

Bank of America expect a June rate cut, from the Bank of Canada

• BoA outline 3 risks to their projection

Bank of America expect the Bank of Canada to cut in June, citing core inflation that keeps on falling and the labour market that keeps on softening.

BoA note there is one more CPI reading prior the BoC June 5 meeting, But:

• The risk to our call is that the BoC waits and delays the cut until July (there are three inflation prints before the July meeting).
• We believe the BoC can cut even if the Fed takes longer to cut
• In our view, only an unexpected upward trend in core inflation or a big increase in the fiscal deficit could derail a BoC cut this summer.
• Another risk is much higher oil prices.
• We expect the policy rate at 3.75% by end-2024.

BoC rate:

Commodities

Gold price shines as geopolitical tensions outweigh faded US rate cut hopes

• Gold price exhibits strength as geopolitical tensions keep safe-have demand firm.
• The US Dollar bounces back after Fed Williams deliver a hawkish ineterst rate outlook
• Fed Mester is confident about policy normalisation but cautioned that it should not be done in a hurry.

Gold rebounds to $2,380 in Thursday’s early American session after posting losses on Wednesday. The precious metal holds gains amid fears that Middle East tensions could worsen and spread beyond Gaza if Israel responds brutally to Iran.

Gold market movers: Gold price holds gains despite rebound in US Dollar

• Gold price recovers majority of Wednesday’s losses and rises higher to $2,380 as investors remain worried about geopolitical tensions. Traders continue to gung-ho for Gold amid fears that Israel could retaliate to Iran’s attack on their territory in which the Iranian military launched hundreds of drones and missiles.
• The US Dollar rebounds despite other central banks from developed nations are also expected to delay their rate cut plans due to persistent price pressures. The US Dollar Index, which tracks the US Dollar’s value against six major currencies, recovers after correcting to 105.75. 
• The near-term demand for the US Dollar remains firm as Federal Reserve policymakers see interest rates remaining higher for a longer period until they get convincing data that inflation will return sustainably to the desired rate of 2%. 

Silver clings to $28.00 amid high US yields

• Silver maintains modest gains supported by a still-bullish market sentiment despite high US Treasury yields.
• Technical outlook favorable as the Relative Strength Index (RSI) indicates buying activity despite a slight dip.
• Potential resistance and breakout points set at $28.75 and $29.00, with eyes on surpassing the year-to-date high of $29.79.

Silver clings to modest gains of 0.29% and stays above $28.00 for the sixth consecutive trading day amid higher US Treasury bond yields and a strong US Dollar. At the time of writing, the white metal trades at $28.30 after hitting a daily low of $28.14.

Silver Technical outlook

The grey metal continues to hold to the $28.00 threshold, while the Relative Strength Index (RSI) continues to edge lower. One could assume that buyers are taking a respite as the RSI edges lower, but it remains above the latest through of 54.00. With that said, Silver remains upward-biased as momentum favors bulls.

Crude oil settles at $82.73

• $0.04 or 0.05%

Crude oil futures features are settling at $82.73.

That’s up $0.04 or 0.05%

EU News

European major indices closing higher

• Spain’s Ibex is the biggest winner today

Major European indices are closing higher for the second . The gains are led by the Spain’s Ibex which rose by 1.3%.

A look at the final numbers shows:

• German DAX, +0.45%
• France CAC, +0.55%
• UK FTSE 100 +0.44%
• Spain’s Ibex was 1.30%
• Italy’s FTSE MIB +0.74%

Eurozone February current account balance €29.5 billion vs €39.4 billion prior

• Latest data released by the ECB – 18 April 2024
• Surpluses were recorded for goods (€34 billion)
• services (€7 billion)
• deficits were recorded for secondary income (€9 billion)
• primary income (€2 billion)

German economy likely expanded in Q1 – Bundesbank

• The German central bank comments in its monthly economic report

• Unexpected boost from industry and construction likely led to expansion in Q1
• But there is still no evidence of sustained improvement for the German economy
• Demand for industrial products domestically and abroad remains weak, continues to decline
• Higher rates and economic uncertainty are holding back investment
• Households are also still hesitant to spend
• It is unclear that the increase in economic output will continue in Q2

Switzerland March trade balance CHF 3.54 billion vs CHF 3.66 billion prior

• Latest data released by the Federal Statistics Office – 18 April 2024

• Prior CHF 3.66 billion; revised to CHF 3.68 billion

BOE Greene:Latest pay data shows pretty high wage growth,but moving in the right direction

• BOEs Greene speaking

• latest patent data shows pretty high wage growth, though moving in the right direction.
• Latest inflation data surprised on the upside little
• Wage growth in services price inflation are not consistent with this sustainable return to 2% inflation.
• UK labor market loosening, but still remains pretty tight. We expect inflation to return to target in coming months, but don’t expect it to stay there.
• I don’t think a rate cut is imminent.

ECB Rehn:Inflation is converging towards the ECBs 2% target

• ECBs Rehn speaking
• inflation is converging towards ECBs 2% target
• monetary restraint is continuing to reduce inflation and impact the real economy.
• Although ECB rates are at levels that are making substantial contributions to ongoing disinflation process, we no longer see need to maintain them at current levels for a long duration.
• Provided we are confident inflation will continue converging to our 2% target in a sustained way, the time will be right in June to start easing the monetary policy stance and to cut rates.
• This assumes there will be no further setbacks in the geopolitical situation and thus in energy prices.

ECB’s Knot: Not uncomfortable with market pricing of rate cuts

• Increasingly confident about the disinflationary process

Meanwhile Nagel is also speaking:

• Says he sees a cautious slide in rates after June

ECB’s de Guindos: Appropriate to loosen restrictive policy if inflation conditions are met

• Remarks by ECB vice president, Luis de Guindos

In his words: “If our updated assessment of the inflation outlook, the dynamics of underlying inflation and the strength of monetary transmission were to further increase our confidence that inflation is converging to our target in a sustained manner, it would be appropriate to reduce the current level of monetary policy restriction.”

ECB’s Vasle sees rates much closer to 3% at year-end

• From 4% currently

European Central Bank policymaker Bostjan Vasle, Slovenia’s central bank governor, spoke wtih Reuters on the sidelines of the International Monetary Fund and World Bank’s Spring Meetings.

• “We should be much closer to 3% towards the end of the year if everything goes according to plan”
• cautioned, though, that he saw “some worrying developments in the Middle East”

Asia-Pacific-World News

PBOC cautions against ‘one-sided’ pursuit of credit expansion

• This comes after China data showed that new bank lending slowed more than anticipated last month

This relates to the latest money supply and credit data. Of note, broad credit growth hit a record low in March. And that bolsters the case for the PBOC to step up stimulus measures to try and prop up the economy. In light of that, the Chinese central bank is warning that:

“With the transition of the economy from high-speed growth to high quality development, it is even more necessary to change the mindset of one-side pursuit of scale and establish the concept of prioritising quality and efficiency. Credit allocation should ultimately be in line with the needs of the real economy. The key is to grasp the level well, rather than the more, the better.”

PBOC deputy governor says will keep yuan exchange rate basically stable

• Adds that recent improvement in the economy will provide support for the yuan currency
• Has confidence in the conditions and ability to keep FX market stable
• Will prevent formation of one-sided expectations on the yuan

IMF says surging US & China debt pose risks for global public finances

• Mention Italy and the UK also

International Monetary Fund (IMF) with the warnings, from the latest of their twice-yearly report on government borrowing:

• projected that U.S. government debt relative to economic output will rise by 70% by 2053, while Chinese debt will more than double by the same year
• Warns surge in US, China debt could have ‘profound’ impact on global economy
• Sees global government debt rising to 98.8% of GDP in 2029
• Also ‘critical’ that Italy and the UK address their debt problems
• Global election year set to push budget deficits higher as spending rises

PBOC sets USD/ CNY reference rate for today at 7.1020 (vs. estimate at 7.2281)

• PBOC CNY reference rate setting for the trading session ahead.
• PBOC injects 2bn via 7-day RR, sets rate at an unchanged 1.8%
• 2bn yuan of RRs mature today
• the net neutral on the day in OMOs

ICYMI – US President Biden calls for a tripling of tariffs on Chinese steel

• Biden with an election pitch in Pittsburgh

President Joe Biden spoke in Pittsburgh, the centre of the American steel industry, on Wednesday:

• “The bottom line is I want fair competition with China, not conflict,”
• “And we’re in a stronger position to win the economic competition in the 21st century against China, or anywhere else, because we’re investing in America and American workers again.”

G7 statement says central banks remain firmly committed to achieving price stability

• Global economy has shown resilience to multiple shocks

G7 statement, Headlines via Reuters:

• Global economy has shown resilience to multiple shocks but growth prospects remain below historic averages

• Central banks remain firmly committed to achieving price stability
• Significant geo-political risks from Russia’s war against Ukraine and middle east situation could affect trade, supply chains and commodity prices
• Welcomes EU proposal to direct extraordinary revenues from Russia’s frozen asset to aid Ukraine
• Will continue working on all possible avenues by which frozen Russian assets could be used to support Ukraine
• Focus on financial stability and regulatory issues is vital to ensure functioning of financial system given threats to global economy
• Remain committed to holding on to frozen Russian assets
• We’re concerned about the crisis in Gaza
• Will ensure close coordination of any future measure to diminish Iran’s ability to acquire, produce or transfer weapons
• Call for stability in the wider region, noting economic risks posed by regional escalation

Australian February March unemployment rate 3.8% (vs. 3.9% expected)

• Employment report from Australia for March 2024

The Australian employment report has spat out volatile m/m figures and that continued today. After the huge jump in jobs in February the March figure was a negative.

Over the year employment grew 2.4%, which is indicative of a tight labour market. But, not as tight as it was.

• Hours worked rose 0.9% m/m and 1.7% y/y
• Total number unemployed people is above 600k for the third consecutive month
• underemployment rate fell 0.1% to 6.5%
• underutilisation rate (this combines the unemployment and underemployment rates) stayed at 10.3%, which is +0.5% up from March of 2023
• trend jobless rate remained at 3.9% for the fifth month in a row 3 (the figures above are the seasonally adjusted, not the trend)

ABS:

• “In trend terms, employment grew by 29,000 people (0.2 per cent) and hours worked remained stable in March.
• The latest trend data showed that hours worked had fallen during the second half of 2023 but had changed little since December 2023.”

Australia Q1 business confidence -2 (prior -6)

• National Australia Bank quarterly business survey for the January – March quarter of 2024

Reserve Bank of Australia: Chinas Monetary Policy Framework, Financial Market Transmission

• From the latest RBA ‘Bulletin’, for April 2024

It’s a quarterly publication from the Bank with various articles on the economy, policy, and wider topics.

• While it has evolved significantly over the years, China’s monetary policy framework continues to differ in some important respects to those in most advanced economies.

BoJ’s Noguchi: essential for BoJ to maintain ultra-loose monetary policy

• Bank of Japan board member Asahi Noguchi speaking.

Bank of Japan board member Asahi Noguchi:

• Essential for BOJ to maintain ultra-loose monetary policy, seek balance in labour supply and demand
• Japan is seeing wage hikes unseen in the past via spring wage negotiations
• Essential to continue to maintain appropriate balance between labour supply and demand through the continuation of its accommodative monetary policy to achieve the 2% price target
• Japan must achieve positive wage-inflation cycle as soon as possible and for this, service prices must keep rising
• Last year’s spring labour-management negotiations have triggered an unprecedented wave of wage increases
• Another factor that is key is for small manufacturers to be able to smoothly pass on rising wage costs to prices
• If wage hike translates into higher prices, that will show through rise in service prices and this trend is clearly appearing

• Focus now is on the pace at which the policy rate will be adjusted and at what level it will eventually stabilize
• Long-term neutral interest rate is highly likely to be lower than that of other countries

• At some point in future, it’s desirable to start shrinking BOJ’s balance sheet
• Steps BOJ decided in March is a move toward this direction of future shrinking of BOJ’s balance sheet
• I dissented to BOJ’s March decision since I thought it would be appropriate to maintain JGB buying under negative rate

• Rise in service prices not driven mainly by wage hikes yet
• Japan’s economyin in a moderate recovery trend, but recently growth has stalled

Japan’s Kanda says G7 reconfirmed commitment on forex stance put forward by Japan

• Japan’s ‘top currency diplomat’.

Japan’s Finance Ministry’s Vice Finance Minister for International Affairs Kanda. He is the official who will instruct the BOJ to intervene, when he judges it necessary. Often referred to as Japan’s ‘top currency diplomat’.

• G7 statement reconfirmed commitment on forex on back of stance put forward by Japan
• Won’t comment on FX levels
• G7 discussion on Iran language was a bit complicated but haven’t yet reached conclusion on what sanction should be applied
• Japan is in talks on FX, other issues, with us and other countries daily
• Japan, South Korea face similar situation which is that they pay imports mostly via dollar, therefore are prone to be sensitive to FX volatility

Cryptocurrency News

XRP struggles to recover as lingering Ripple lawsuit could reach Supreme Court, former SEC litigator says

• The SEC vs. Ripple potential showdown at the Supreme Court is likely, says former SEC litigator Ladan Stewart. 
• XRP Ledger calls developers, businesses and investors to build on the blockchain, extending Apex 2024 registration until April 30. 
• XRP price remains below $0.50, failing to breach key resistance. 

XRP price hovers below the key $0.50 level on Thursday after failing at another attempt to break and close above the resistance for the fourth day in a row. 

XRP’s subdued performance, its price has fallen by around 20% in the last seven days comes amid a broad crypto market correction and as market participants continue to discuss the lingering legal battle between Ripple and the Securities Exchanges Commission. Former SEC litigator Ladan Stewart said on Wednesday that Ripple is likely to face a Supreme Court showdown with the US financial regulator. 

Polygon and Cosmos blockchains to be connected by Union Labs, MATIC, ATOM react positively

• Polygon and Cosmos blockchain ecosystems will be connected by a layer, Union Labs. 
• Union Labs will connect Polygon’s AggLayer with Cosmos ecosystem’s Inter-Blockchain Communication Protocol. 
• MATIC and COSMOS price added nearly 2% gains on Thursday. 

Polygon blockchain’s aggregation layer (AggLayer) and Cosmos’s Inter Blockchain Communication (IBC) will be connected via Union Lab’s proposed solution. The modular interoperability layer is expected to ensure a smooth flow of liquidity between the two large blockchain ecosystems.

Union Layer could connect Polygon and Cosmos in this manner

DeFi users and traders using Layer 2 scaling solutions could benefit from a greater access to liquidity and movement between projects like Polygon and Cosmos. 

Union Labs plans to power one such integration through a modular interoperability layer. The solution will ensure a smooth flow of liquidity between the two chains and maintain a unified architecture. It will offer a simple user experience (UX) for traders. 

Bitcoin likely to drop after the halving, JPMorgan says

• JPMorgan said it expects bitcoin to fall after the reward halving.
• The bank’s analysis shows that the cryptocurrency remains overbought.
• Miners will be most affected by the event, the report said.

Bitcoin is likely to weaken after the reward halving, a quadrennial event that slows the rate of growth in bitcoin supply and looks set to occur around April 19-20, Wall Street giant JPMorgan said in a research report on Wednesday.

The bank sees downside for the world’s largest cryptocurrency after the halving because the market is still in overbought conditions, according to its analysis of open interest in bitcoin futures.

Furthermore, the cryptocurrency price of about $61,200 is still above the bank’s volatility-adjusted comparison with gold, which sets it at $45,000, and its projected production cost of $42,000 after the halving. The bitcoin production cost has historically acted as a lower boundary for BTC prices.

JPMorgan also notes that venture-capital funding remains subdued despite the recent crypto market resurgence.

MANTA suffers 4% pullback after unlocking tokens worth $40 million

• Manta Network unlocked 21.67 million MANTA tokens worth $40.08 million early on Thursday. 
• The tokens were allocated to airdrop and public sale and represent over 8% of MANTA’s circulating supply. 
• MANTA price erased 4% of its value on Thursday. 

Manta Network (MANTA) unlocked over 8% of its circulating supply on Thursday. The unlocked tokens were airdropped and distributed in public sale, according to data from Tokenunlocks. 

MANTA price wiped out 4% of its value on April 18. 

Follow our recently launched pages. Join our community and never miss a beat in the dynamic world of trading.

https://www.facebook.com/BilalsTechLtd

https://www.linkedin.com/company/bilals-tech/

https://t.me/Market_Moving_News