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SignalPlus Morning Briefing 18 Apr 2023

发布日期: 2023年4月18日

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U.S. Empire State manufacturing index surged 35.4 points to 10.8 in April,?much higher than forecast and the highest print since July. Strength was seen across all sub-components, with new orders climbing to 25.1 vs -21.7 the past month, prices paid falling to 33.0 from 41.9, and employment improving to -8 vs -10.1 the past month.

US NAHB housing index printed +1 higher to 45 in April, for the 4th straight monthly gain and the highest levels since September. % of builders lowering prices went down as housing supply remains tight, dropping to just 30% vs close to 40% versus Q4. NAHB chief economist Dietz said that lending conditions are tight, but there has not been “significant evidence that pressure on the regional bank system has made this lending environment for builders and land developers worse.”

Lending conditions have been tightening for US businesses, though the drop in commercial bank assets on H.8 is overstated. The 2-week change in total bank assets, a proxy for bank credit, showed a -$200bln drop during that period and a more rapid pace than even during the GFC. However, much of that decline was due to the failure of the two banks whose ~$170bln of assets rolled off commercial banks’ balance sheets and into FDIC custody. FDIC-adjusted changes in bank assets are still lower, but much less ominous than what the headline shows.

US Treasury rates continued to increase with a bear-flattening tune as a continuation of the post-retail sales move, as the combination of a still robust consumer, early signs of stabilization in residential housing, a large jump in Empire new orders, and benign bank earnings are still painting an economic reality where data is not “soft enough” to suggest an imminent recession, while disinflation forces are stabilizing prices at levels that are still above Fed target rates. The latest scorecard shows May hiking odds back to 85% (from <50% last month), year-end Dec pricing in cumulative ~50bp of cuts (vs ~100bp at the worst levels), and terminal rates stabilizing at 5.07% vs a low of 4.75% during the depth of the SVB crisis.

There is a new savings alternative in town.?Apple has entered the deposit-taking competition with a new high-yield savings account paying 4.15% APY linked to the Apple Credit Card and seamlessly integrated into iOS. The account will be launched through Goldman Sachs and is FDIC insured for up to $250K on par with other savings institutions. The fight for deposits is happening at a time when regional banks reported large deposit flights in Q1, with Charles Schwab seeing deposit drops of -11% in Q1 and -30% YoY. State Street’s deposits fell -5% in Q1, while M&T Bank reported -3% over that same period. Collectively, the 3 banks reported total deposit outflows of $60bln in the first quarter of 2023.

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Crypto investment products saw inflows of US$114m last week, based on data from Coinshares. The 4-week inflow figures of $345M has now mostly covered the SVB-led outflows of $408M earlier in March, though daily spot volumes are still operating at just around ~50% of the peak from last year. Despite the success Shapella upgrade on Ethereum, BTC continues to dominate mainstream inflow interest responsible for ~90% of the recent inflows thanks to the store-of-value narrative.

ETH selling pressure is starting to pick up gradually?as Coinbase enables the function to redeem staked ETH on its platform. Binance will enable ETH withdrawals from Wednesday and it’ll be interesting to see if this weighs on spot prices further in the near term.

ETH options volume exceeded $1bln on Deribit last week, led by bullish call expressions, while ETH options volume also overtook BTC’s for the first time since early 2023.?However, overall implied vol levels remain depressed as volatility was largely sold post-Shapella, though skews continue to improve on the upside as marginal sentiment continues to pivot bullish similar given the sustainability of the spot rally.