登录查看更多内容

SignalPlus Morning Briefing 4 Apr 2023

发布日期: 2023年4月4日

+ 关注

Oil prices jumped over 6% on Monday with OPEC+’s surprise announcement of a 1.6mm bpd cut of production cut starting in May 2023. With crude’s underlying fundamentals having weakened in past months, namely with faster than expected stock builds in 2023, a slower than hoped pace of China reopening, and US oil exports to the world hitting record levels, traders were positioned heavily short in oil futures, and we wouldn’t be surprised to see prices overshoot to the upside.

Jump in oil prices making the Fed’s job a lot harder.?Just as economic surveys and data were showing continued signs of disinflation, with the labour market softening, the jump in oil prices might complicate inflation outlook again over the next few months, especially with the US’s SPR (Strategic Petroleum Reserve) likely not having been replenished to act as a buffer this time around. St. Louis Fed’s Bullard stated that OPEc’s decision to cut output was a “surprise” and the unexpected increase in oil prices could make the Fed’s job of lowering inflation more challenging.

US ISM dropped -1.4 points to 46.3 in March, below estimates, the lowest since May 2020?and in contraction since November 2022. The employment index fell for a 3rd consecutive month to 46.9 from 49.1, new orders fell to 44.3 from 47 and prices paid fell to 49.2 from 51.3. Equity markets were little changed from the release and choosing to focus on the softening disinflation component as a positive sign instead of worrying about growth concerns.

Interest rate volatility continues to settle as equity sentiment improved.?Dec SOFR futures saw its lowest intraday range since early March, while the overall MOVE index have also come off sharply since the March highs. May rate hikes are back to ~65% level while about 60bp of cuts are expected by the end of 2023, down from 85bp from a couple of weeks ago.

US corporate equities will be in focus soon, with CPI the last big expected event?before the earnings calendar kick into full throttle. We expect the next move in stocks to be driven off earnings performance rather than macro releases as we get more clarity on how management forecasts have changed post the banking turmoil in Q1 as well as the dramatic eases in forward Fed discount rates.

Citi credit card data came in weak in March, with spending dropping around 0.7% MoM for the preliminary estimates and showing overall consumer sending continue to level off from 2022 levels. Preliminary select aggregate services are down by a larger 4.13% MoM, dragged down by recreation and transportation.

领英推荐

The struggling commerical real estate sector is back on the news?as Blackstone’s $70B real estate trust for UHNW individuals faced a large $4.5B redemption in March, following $3.9B in February, and the company was forced to gate withdrawals for a 5th consecutive month. The $20T CRE market has around $5.5T of debt financing, with about half of the funding coming from commercial banks. About $900B of that debt will be coming due in 2023 and 2024, and will be forced to roll-over a much higher prevailing rates than when they were initially financed in the ZIRP days.

Crypto prices were steady and range bound around 28k on BTC and ETH, though the most interesting tidbit of the was probably Elon’s changing of the twitter logo from the birdie to the Dogecoin avatar, spiking prices by 20% as the colourful entrepreneur continues to show a particular affinity for this token.