The Morning Hark - 5 Apr 2022
Today’s focus ……..US ISM Services at 15:00 BST and Fed talkers Brainard, Daly and Williams
Daily roundup - all prices are at 7.00 GMT/8.00 BST with changes reflecting movement from midnight GMT
Oil?- Brent and WTI futures are both moving higher in early trading at 109.30 and 104.95 respectively. With details emerging about Russian actions against civilians in Ukraine, the rhetoric has toughened in the West. Yesterday Biden calls Putin “a war criminal”, and with the US reserves news fully in the price, oil has rebounded off its recent lows.
EQ?- Equity markets are higher across the board in Asia with the Hang Seng and the Nikkei up to 22,502 and 27,787 respectively. Hang Seng is once again performing the best although it’s a holiday in China and Hong Kong so trading has been slow.
European indices are slightly higher while US futures are flat on the day.
Gold?- Futures almost unchanged today at 1935.
FI?- The US10y is unchanged today with yield at 2.43 on the 10 year with prices sitting at 121.29. JGB auction went well today with a 3.61 cover ratio. There was thinking in the market that a bad auction would increase the Japanese political rhetoric to change interest rate policy but that did not come to fruition.
FX?–?USDJPY holds firm post JGB auction with little to no movement seen since the results were published. JPY should still weaken but currently the market has the position on and we await further impetus. AUD is the best performer on the day after the RBA announcement where they left rates unchanged but dropped the word “patient” from their statement. On the announcement, AUD immediately rallied 70 pips to be up 0.95%.
Others?- Bitcoin continued its move higher and sits at 46,700 some 400usd higher on the day. We still like 45,000 as a level to hold longs against.
The volatility measure for equities (VIX) is again lower today, down 5.4% at 18.57 and rates (MOVE) is unchanged.
The Russian invasion of Ukraine rumbles on with Europe and US threatening more sanctions to come. This should be nailed on now the news of civilian deaths and suspected mass graves are hitting the wires. The US yesterday announced they would not be allowing Russia to use USD in US banks for their bond payments.
News from the Ukrainian army is good with them retaking the north of Ukraine forcing Russia to retreat from Chernihiv and North Kyiv. Talks are on going but the end still looks a long way away.
Following the JGB 10 year auction the BOJ has defended its YCC policy and reiterated the inflation target. Mention of the currency was made to the point that they are watching rapid moves carefully.
As we highlighted yesterday, the RBA did not raise rates this morning, but they certainly moved the dial by dropping the word “patient” from their statement. This opens up the possibility of a rate move in May or June and the market reacted as expected with a rapid move up through 0.7556 technical level.
We have included an article below from MacroTactical Crypto regarding Bitcoin and tax season which is an interesting read from Brent Donnelly available on Harkster.
???The main highlights for the day in terms of data and speakers:?
Brainard, Daly and Williams all speak today with Brainard likely the most important of them. If she shows interest in a 50bp hike it would be market impactful. She will speak directly after the ISM services print which will be watched due to the ISM manufacturing miss on Friday.?
Good luck.
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领英推荐
???Articles on?Harkster?and from outside exploring in more depth some of the themes above:
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US rates
Pepperstone -?Will an inverted yield curve spell impending doom?
Zerohedge -?The Yield Curve Inverts: What Happens Next
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Gold and The Rouble
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LME
Front Month -?LME: The Aftermath
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Bitcoin and tax season
MacroTactical Crypto -?MacroTactical Crypto #15
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???Top 5 trending links on Harkster from yesterday:
Discover more on?harkster.com
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