Market Observations - Apr 1
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Crypto Market Rundown:
The global crypto market cap is $2.67T, a 0.98% increase over the last day. The total crypto market volume over the last 24 hours is $62.45B, which makes a 13.54% decrease d/d. BTC Bitcoin’s dominance is currently 51.92%, a decrease of 0.07% over the day.
Top 5 Gainers on Uphold Ascent in the past 24H
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Today marks the start of a new week, a new month, a new quarter, and a new set of data to get investors/markets going. The PCS data landed on Friday when markets were closed. The PCE index rose 2.5% in February, up from 2.4% in the prior month. After Friday's numbers, Powell said the latest data was "along the lines of what we would like to see."
The dollar is trading quietly against the G10 currencies as European markets remain on holiday. The dollar-bloc currencies are leading with minor gains, perhaps helped on the margins by better-than-expected Chinese PMI. Still, the Scandis, which also typically do well amid a better global growth profile, are the laggards. This may speak to the light liquidity conditions. Japan may have missed a tactical opportunity to intervene to knock the dollar back ahead of what may be a solid US jobs report at the end of the week.
Japanese shares sold off earlier today, with the Nikkei shedding 1.4%. Chinese shares rallied, and the CSI 300 rose nearly 1.65%, its third consecutive advance and the largest rally in a little over a month. Hong Kong and Australian markets were on holiday, while South Korean and Taiwanese shares were narrowly mixed.
European markets are mostly closed.
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US index futures are 0.25%-0.50% better.
US yields are a little softer. The 10-year yield is off a little more than a basis point to 4.19%, and the two-year yield is off almost 3bps to 4.59%.
Gold has extended its pre-weekend rally. It gapped higher and rose to a new record high near $2265.75 before stabilizing around $2250. The gap extended to the pre-weekend high, slightly below $2232.
May WTI also extended its gains to reach $83.60, its highest level since last October. It rose 3.15% last week, its third consecutive weekly advance.
Over the weekend, China reported a better-than-expected improvement in the March PMI. For the first time since last September, the manufacturing PMI rose above 50, to 50.8. The non-manufacturing PMI rose to 53.0 from 51.4. That is the strongest reading since last June. The composite reading edged up to 52.7 from 50.9 for the past two months, the best in 11 months. Last March, the composite PMI was at 57.0, a multi-year high. Earlier today, the Caixin manufacturing PMI was reported at 51.1, up from 50.9. It was at 50 last March. Caixin's services and composite PMI are due on Wednesday.
The Eurozone will provide its initial estimate of March inflation and February unemployment on Wednesday morning, which is the week's highlight. With one exception in December, the Eurozone's year-over-year CPI has not risen since last April. It looks likely to have edged down to 2.5% from 2.6% in February. That would be the lowest since July 2021. The core rate may have slipped slightly to 3.0% from 3.1%. It peaked last March at 5.7%. The ECB forecast this year's CPI to be at 2.3% at the end of the year. Given the stickiness of service inflation, which has been stuck for the last few months at 4%, and the lowest unemployment rate in EMU history (6.4%), officials are allowed to play for more time. The swaps market prices in about a 1-in-10 chance of a cut at the April 11 ECB meeting, but the quarter-point cut is nearly fully discounted for June.
The U.S. reported February personal income, consumption, and the deflators before the weekend. Without the benefit of the Social Security cost-of-living adjustment and the jump in dividend payout, personal income rose a more modest 0.4% after January'sJanuary's 1.0% gain. Spending, less hampered by poor weather, rebounded 0.5% after a 0.2% rise in January. The deflators were in line with expectations following the previously released CPI and PPI. The headline pace crept up to 2.5% from 2.4%, while the core measure was steady at 2.8%.
Today's US highlights include construction spending, which is expected to have rebounded from the weather-induced weakness in January, and the ISM manufacturing, where the slowdown activity and new orders may have moderated. The highlight of the week is the monthly employment data on Friday. The median forecast is for about 215k, the 4th consecutive month above 200k and around the six-month average. Recall that in the two years before COVID, the US created slightly less than 180k jobs a month. The unemployment rate may tick down to 3.8% from 3.9% in February. Average hourly earnings look poised to drift closer to 4.1%- 4.0% year-over-year after being stuck at 4.3%-4.4% for the last four months. They have not been below 4.3% since June 2021. Several Fed officials, including Fed Chair Powell, will speak this week on Wednesday. Recall that at the March FOMC meeting, nine Fed officials thought two cuts or less would be appropriate, while ten officials saw three cuts or more.
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Please note that Uphold and its affiliates do not provide investment, tax, or legal advice. This message is for informational purposes only and takes no account of particular personal or market circumstances, and should not be relied upon as investment, tax, or legal advice. For investment, tax, or legal advice and before taking any action you should consult your own advisors. Note that digital assets such as cryptocurrencies present unique risks for investors. Please see our disclaimer regarding risks specific to holding digital assets before investing Crypto assets are unregulated, highly volatile, and subject to significant risks, which may not be suitable for you. Not available in all jurisdictions. Don’t invest unless you’re prepared to lose all the money you invest. This is a high-risk investment and you should not expect to be protected if something goes wrong.