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Market Data
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Global
*Data as of 4pm WAT
Market News
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Global
Market Commentary:
Currencies/Macro:
The US dollar index fell by 0.3% as US Treasury yields slightly retreated following recent gains. Concurrently, equity markets continued to struggle, with the S&P 500 extending its decline to over 4% from record highs.
The Euro appreciated against the dollar, rising from 1.0606 to 1.0680, while the USD/JPY pair decreased from 154.79 to 154.16.
The Federal Reserve's Beige Book reported a slight expansion in the US economy since late February. The report highlighted challenges in price transmission, with mixed consumer spending patterns across districts, noting particular weakness in discretionary spending due to high price sensitivity among consumers.
UK CPI data for March showed a smaller-than-anticipated decline, recording a monthly increase of 0.6% and an annual rate of 3.2%, slightly above forecasts. Services inflation saw a minor decrease to 6.0% y/y from 6.1% y/y, indicating persistent price pressures in the service sector.
Interest Rates:
The US 2-year Treasury yield decreased from 5.00% to 4.93%, dipping as low as 4.91%, while the 10-year Treasury yield fell from 4.68% to 4.59%, reaching a low of 4.57%. The markets currently estimate a 45% chance of a rate cut by the Federal Reserve in July, with no change expected at the upcoming meeting on May 2.
In the credit markets, Itraxx Europe saw a slight tightening by 0.4 basis points to 61.3bps, with Lufthansa and Bayer performing well, whereas Sanofi and Heineken underperformed.
The CDX IG index experienced some widening, increasing by 0.7 basis points to 58.6bps. Hess and FedEx were among the top performers, while General Motors and DXC Technology negatively impacted the index.
Cash bonds in the corporate sector widened by 0.4 points to 124.3, with the communications and technology sectors performing well. In contrast, the materials sector, especially subordinated bonds, along with subordinated financials, underperformed.
Commodities:
Crude oil markets saw a significant drop, with the May WTI contract decreasing by 3% to $82.81 and the June Brent contract down 2.85% to $87.45, marking a three-week low for both.
The EIA reported an increase in crude inventories by 2.7 million barrels last week, reaching the highest level since June of the previous year.
Gasoline stocks decreased by 1.15 million barrels and diesel stocks by 2.75 million barrels. However, diesel demand reached its lowest seasonal level since 1999 on a four-week average basis.
U.S. crude production remained steady at 13.1 million barrels per day, while exports rose to 4.72 million barrels per day.
The market's negative sentiment was further influenced by the lack of military response from Israel or the U.S. to recent direct attacks by Iran, although the possibility of sanctions continues to provide some support.
The U.S. Treasury's license allowing oil and gas production in Venezuela will expire today without renewal, due to lack of progress toward fair elections by Nicolás Maduro's regime.
Momentum is building for a bill by Republican Senator Marco Rubio that would impose sanctions on importers of Iranian crude, potentially being included in a Ukraine funding bill with a vote possibly occurring on Saturday.
U.S. Treasury Secretary Yellen indicated that further sanctions against Iran are expected in the coming days.
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