Finance Friday
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Market Data
Local
Global
*Data as of 4pm WAT
Market News
Local
Global
Market Commentary:
Currencies/Macro:
The US dollar index increased by 0.2% as US treasury yields rose, influenced by hawkish remarks from NY Fed President Williams. He mentioned that a rate hike could be possible depending on future data, although it is not his base expectation.
EUR declined from 1.0690 to 1.0642, while USD/JPY rose from 154.07 to 154.68.
US labor market remains tight, with weekly jobless claims holding steady at 212k, and continuing claims slightly above expectations at 1.812 million.
The Philadelphia Fed business outlook significantly outperformed expectations, registering at 15.2, the highest since April 2022. Conversely, the Conference Board leading index declined by 0.3%, marking a low since April 2020.
US existing home sales in March decreased by 4.3%, slightly worse than the anticipated 4.1% decline.
FOMC member Williams emphasized that there is no immediate need to cut interest rates, stating that current policy levels are effectively guiding towards economic goals.
ECB member Holzmann remarked that the ECB's ability to ease might be constrained by the Fed's hesitancy, noting possible similarities in inflationary pressures across regions.
BoE Governor Bailey commented that UK inflation risks are comparatively lower than in the US, highlighting an expected significant drop in the upcoming April inflation data due to the UK's unique energy pricing system. BoE member Greene remained cautious about easing monetary policy soon.
Interest Rates:
The US 2-year Treasury yield increased from 4.91% to 4.99%, and the 10-year Treasury yield rose from 4.56% to 4.65%.
Market expectations are for the Fed funds rate, currently at 5.375% (mid), to remain unchanged at the upcoming meeting on May 2, with an 80% chance of a rate cut by September.
Commodities:
Crude markets remained volatile but largely directionless amidst ongoing Middle East tensions. The May WTI contract held steady at $82.71, while the June Brent contract decreased slightly by 0.26% to $87.06.
Iran issued a warning against potential Israeli attacks on its nuclear sites, suggesting a possible reconsideration of its nuclear policies following new US and UK sanctions targeting Iran's drone program.
The US did not renew a Treasury Department license for oil and gas production in Venezuela, citing the lack of progress towards fair elections scheduled for July in the country.
Sanctions on Iranian oil were added to a funding bill for Ukraine and Israel, with a vote anticipated on Saturday.
Signs of weakening were evident in the global diesel market, with prompt contracts in Europe, the US, and Asia all moving into contango. The May NY diesel contract hit its lowest level since January, indicating softening demand.
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