The Morning Hark - 14 Mar 2024

Today’s focus...Mid month malaise. Death, taxes and Fx in Asia……..at least we have Cheltenham.

Overnight Highlights

Prices are at 6.45 GMT/2.45 EST, with changes reflecting movement from midnight GMT

Oil - Oil flat in Asia with Brent and Crude May futures trading at 84.20 and 79.40 respectively. Yesterday saw a decent rally for oil after the EIA data showed a further slide for gasoline inventories in the US. In addition reports of further Ukraine drone attacks on Russian refineries added to oil’s bid tone.

EQ - Asian equity markets mixed with the Hang Seng trading off one percent at 16,960. The Nikkei however up close to one percent as higher US yields are weighing on the JPY. Currently the index at 38,600.

The US indices flatlining in Asia with the S&P and Nasdaq futures currently at 5240 and 18,390 respectively.

Gold - Gold off smalls in Asia with April futures currently trading at 2172. Gold recovered most of its post CPI sell off yesterday.

FI - Global yields firm in Asia continuing on the theme post CPI gains with the US2y and US10y futures yields currently at 4.64% and 4.20% respectively.

European yields followed the US lead and ended yesterday a touch higher with the German 10y at 2.36% and the Italian 10y yield at 3.59%.

UK gilt 10y similarly at 4.12%.

FX - FX in Asia, to be frank, a waste of time. Nothing to see here with the USD Index currently at 102.89. The majors; JPY, EUR and GBP currently at 147.90, 109.40 and 1.2790 respectively. Close the FX desks and save everyone a lot of money and time………

Today’s FX option expiries today in the JPY $3bn at 147. In the NZD we have NZD1bn at 0.6185 with us currently at 0.6160.

Others - Bitcoin and Ethereum, after the post CPI blip, have continued their bid tone and traded well. Yesterday was the first $1bn inflow day for the Bitcoin ETFs, marking another milestone on the road to institutionalisation for the sector. The pair currently at 73,500 and 3980 respectively.

For those with time, and I would suggest FX traders in Asia have a lot on their hands, a good insight into the ETF space with Caitlin Long who is always worth listening to.

TFTC - Bitcoin ETF with Caitlin Long

Macro Themes At Play

Recap

The January UK data dump was unspectacular with everything pretty much bang on expectations. GDP MoM came in at 0.2% with the 3m Avg now at -0.1% and the YoY at -0.3%.

Industrial Production was a touch lower, at -0.2% MoM, than had been expected taking the YoY measure to 0.5%.

Manufacturing Production was bang on at flat for the month with the YoY at 2%. Nothing to see here friends.

EU Industrial Production MoM down 3.2% and its worst print since March of last year and indeed the second worst since the pandemic. YoY now at -6.7% again its second worst reading since the pandemic days.

Central Bank Speakers

ECB’s Kazaks claimed that there was no need to delay ECB rate reduction too much. A decision will come in the next few meetings although uncertainty remains high.

Villeroy was back on the tapes banging on about a Spring rate cut being probable but he favours June over April. However he remains vigilant on inflation but victory is within sight.

BoJ’s Ueda was again a tad more reticent than some of his colleagues on rate hikes. We must scrutinise whether a positive wage inflation cycle emerges in deciding on rate hikes.

The Day Ahead

February’s Swedish Inflation Report the only highlight of the morning.

Rest of the day a lot of ECB speakers then the US PPI and Retail Sales Reports for February.

👏 If you found this briefing helpful, please show the desk some appreciation by giving it a ‘Like’ or a ‘Comment’ at the bottom of the page.

Stay on top of the latest market narratives throughout the day using our curated research & commentary channels on Harkster.com

Main Highlights Ahead

All times in GMT (EST+4 / CET-1 / JST-9)

The main highlights for the day ahead ahead in terms of data and speakers:

Thursday

Sweden Inflation Rate MoM Feb consensus 0.4% vs previous -0.1% (07.00 GMT)

Sweden Inflation Rate YoY Feb consensus 4.7% vs previous 5.4% (07.00 GMT)

Sweden CPIF MoM Feb consensus 0.3% vs previous -0.3% (07.00 GMT)

Sweden CPIF YoY Feb consensus 2.8% vs previous 3.3% (07.00 GMT)

US PPI MoM Feb consensus 0.3% vs previous 0.3% (12.30 GMT)

US PPI YoY Feb consensus 1.1% vs previous 0.9% (12.30 GMT)

US Core PPI MoM Feb consensus 0.2% vs previous 0.5% (12.30 GMT)

US Core PPI YoY Feb consensus 1.9% vs previous 2% (12.30 GMT)

US Retail Sales MoM Feb consensus 0.8% vs previous -0.8% (12.30 GMT)

US Retail Sales YoY Feb consensus % vs previous 0.6% (12.30 GMT)

ECB Speakers

Elderson (09.30 GMT)

Schnabel (11.00 GMT)

Knot (12.00 GMT)

de Guinods (18.00 GMT)

Stoumaras (18.30 GMT)

Good luck.

---

The information provided in this post is for general information purposes only. No information, materials, services, and other content provided in this post constitute solicitation, recommendation, endorsement or any financial, investment, or other advice. Seek independent professional consultation in the form of legal, financial, and fiscal advice before making any investment decision.