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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 experienced a decline against all G10 currencies. The EUR/USD appreciated, reaching its highest point since late January at 1.0915 before stabilizing at 1.0895. The GBP/USD increased by 0.3% to 1.2740, and the USD/JPY dropped from 150.00 to 149.40.
In the US, the ADP private sector employment report for February showed a gain of 140,000 jobs, slightly below the estimated 150,000, but an improvement from the previous month's revised figure of 111,000. The JOLTS job openings for January were in line with expectations at 8.863 million, with the previous month's figure being revised down from 9.026 million to 8.889 million. January's wholesale trade sales saw a decline of 1.7% month-over-month, contrasting with the expected 0.3% increase and the previous month's revised increase of 0.3%.
The Bank of Canada maintained its policy interest rate at 5.0%, aligning with market expectations. Despite holding the rate steady, the central bank's policy statement and Governor Macklem's comments suggested a continued cautious approach. Macklem emphasized that it was still premature to consider reducing the policy interest rate, noting that recent economic data had not presented significant surprises since their January meeting.
Interest Rates:
The US 2-year Treasury yield remained relatively stable at 4.56%, with a brief decrease to 4.51%, whereas the 10-year Treasury yield decreased from 4.16% to 4.11%. Market expectations for the Federal Reserve's funds rate, set at 5.375%, predict it will stay the same at the upcoming 20 March meeting, with an 85% likelihood of a rate reduction by June.
The credit market experienced improvement, with the Main index tightening by 1.5 basis points to 53.5 and the CDX index improving by a basis point to 51. U.S. investment-grade (IG) cash spreads also narrowed by 1-2 basis points. Despite this positive trend, the issuance pace has decelerated; in Europe, five non-sovereign, supranational, and agency (ex-SSA) issuers accessed the market, raising approximately EUR 3.4 billion. Meanwhile, in the U.S., four IG issuers raised around USD 2.3 billion. This reduction in issuance volume is anticipated as market participants await more significant data releases later in the week, including the U.S. non-farm payrolls report.
Commodities:
Crude oil markets experienced an uptick driven by increasing fuel demand and Saudi Arabia's decision to raise oil prices for Asian markets. The April West Texas Intermediate (WTI) contract saw a 1% increase to $78.92, and the May Brent contract rose by 0.95% to $82.80. The Energy Information Administration (EIA) reported a rise in crude inventories by 1.37 million barrels, but notable declines in refined product inventories indicated market tightening, with gasoline stocks dropping by 4.46 million barrels and distillate inventories decreasing by 4.13 million barrels. These reductions brought gasoline and diesel inventories to their lowest levels since November 2022 and March 2022, respectively. The ongoing decline in refined product inventories points to supply constraints rather than increased demand, as evidenced by the lowest four-week average gasoline deliveries in nine years, excluding 2021. Saudi Aramco unexpectedly raised its Arab Light oil price for Asian customers while reducing prices for European buyers. Additionally, maritime security concerns escalated following Houthi militants' attack on the MSC Sky II and the sinking of the Rubymar due to an earlier missile strike.
In the metals sector, remarks by Federal Reserve Chair Jerome Powell influenced market sentiment, leading to price increases. Copper rose by 0.64% to $8,546, and zinc increased by 1.45% to $2,490. South Korea's Young Poong Corp reportedly reduced refined zinc output at its Seokpo smelter, one of the world's largest. Alcoa announced operational cost improvements across its alumina refineries, focusing on better bauxite quality and reducing operations at costlier facilities. Indian company Vedanta is advancing its goal to become the world's most cost-efficient aluminum producer, expanding its alumina refining capacity significantly. Indonesian state miner Antam plans a 53% production boost in nickel ore, while Eramet SA anticipates a substantial output increase, contingent on the Indonesian government's timely permit renewals.
Iron ore prices indicated stabilization above the $115 mark, buoyed by reports of decreasing steel mill stockpiles in China. The April Singapore Exchange (SGX) iron ore contract climbed by $1.70 to $115.85, and the 62% Mysteel index increased by 55 cents to $117.00. Although stockpiles fell 5% from mid-month levels, the three-period rolling average reached new yearly highs.
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