Market Update – March 30 – USD Dips, Stocks Rally, Yen Recovers

USD & Yields dipped and Stocks & Euro rallied (NASDAQ 1.84%) following Russia-Ukraine negotiations. US data (Case-Schiller Housing Index, JOLTS & Consumer Confidence) all stronger than expected adding to high inflation and tight jobs market scenario.  Yen recovered on chatter of BOJ intervention, and OilGold dipped before recovering. The yield curve extended it’s inversion as 10-yr yields dipped under 2.0% before lifting. Asian markets followed US higher (Nikkei & ASX +1.0%, Shanghai 1.51%).

Overnight  –  JPY Retail Sales  missed (-0.8%% vs -0.3% & 1.1%)  German regional CPI coming in hotter than expected (i.e. North Rhine Westphalia March CPI +7.6% vs +5.3%).

USD (USDIndex 98.16). Dipped further to 98.00 zone before recovering.
US Yields 10-yr closed at 2.40% and under 2.0% overnight, now back to 2.36%
EquitiesUSA500 +56.01 (+1.23%) 4631. US500 FUTS  4572 now. APPLE rose for an 11th consecutive day (+1.91%), HOOD up over +24% following AMC rally (+45%) the day before and GME dropped -5.11% 45% as the meme stocks raised their heads again.
USOil – Fell again (over 1.0%) to $98.65 yesterday, but has recovered to $107.00.   
Gold – slipped to $1890 yesterday from Friday’s close at $1955. Back to $1925 now.   
Bitcoin holds onto gains over 45K to top at 48.1K, yesterday, back to 47.4k now. 
FX marketsEURUSD back to test 1.1136 now after 1.0950 test Monday,  USDJPY over 125.00 & new 7-yr highs Monday back to 122.00 now as JP Government signals worries over weak Yen. Cable back to 1.3120 now.    

European Open – The June 10-year Bund future is up 43 ticks, US futures are also higher,  DAX and FTSE 100 futures are down -0.1% and up 0.1% respectively,  as the initial euphoria over the positive headlines on the progress of Russia-Ukraine peace talks has faded.  It still seems a long way to a final agreement and oil prices have backed up from lows under $100 seen in the wake of the initial headlines on the talks yesterday. Meanwhile concern that aggressive central bank action will sap the recovery is lingering. The 2-10 year part of the U.S. Treasury curve inverted yesterday for the first time since 2019, but while the 2-year has dropped back again since, 3 and 5 year rates are still holding above the 10 year. ECB chief economist Lane was out yesterday repeating that a rate hike in Q4 is not cast in stone and that rate moves will be data dependent.

Today – German CPI Prelim, US ADP & GDP (Final/Q4), Speeches from Fed’s Barkin, Bostic & George, ECB’s Lagarde, BoE’s Broadbent

Biggest FX Mover @ (07:30 GMT) USDJPY (-0.76%) Fear of BOJ intervention lifted YEN pairs. Next support 121.00 MAs turned lower, MACD signal line & histogram now  below 0 line and cooling, RSI 36, H1 ATR 0.310, Daily ATR 1.31.

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Stuart Cowell

Head Market Analyst

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