Wealth Wednesday
Ranora Daily - Your daily source for reliable market analysis and news.
Market Data
Local
Global
*Data as of 4pm WAT
Market News
Local
Global
Market Commentary:
Currencies/Macro:
The US dollar index is up 0.1% on the day. EUR fell from 1.0864 to 1.0824, extending its pullback from just shy of 1.10 a couple of weeks ago. USD/JPY rose from 151.21 to 151.60. Japanese officials continue to jawbone and threaten intervention to cap JPY weakness.
US durable goods orders in February rose 1.4% (est. 1.0%, prior revised from -6.2% to 6.9%), with ex-transportation up 0.5% (est. 0.4%, prior revised from -0.4% to -0.3%). The US S&P/Corelogic house price index rose 6.03% y/y (est. 6.12%, prior 5.57%).
Consumer confidence (Conference Board) fell to 104.7 (est. 107.0, prior revised from 106.7 to 104.8), with the present situation rising but expectations falling.
Interest Rates:
The US 2-year Treasury yield rose marginally from 4.58% to 4.59%, while the 10-year yield fell from 4.24% to 4.23%. Markets price the Federal Reserve's funds rate, currently at 5.375% (midpoint), to remain unchanged at the next meeting on May 2, with a 70% chance of a rate cut by June.
Credit spreads were softer, with both Main and CDX widening by half a basis point to 55.5 and 53, respectively, and US investment grade cash spreads widening by 1-2 basis points. This movement comes as we approach month-end on the back of a strong rally year-to-date. Primary market activity picked up again in Europe, with 9 issuers pricing approximately EUR 7.5 billion, as the pipeline was cleared before Easter and month-end.
Commodities:
Crude markets softened due to month-end profit-taking and a stronger US dollar, affecting prices. The May WTI contract decreased by 0.6% to $81.46, and the May Brent contract fell by 0.85% to $86.01. Tracking data from Bloomberg noted unusual behavior from oil tankers delivering Russian crude to India, with four more tankers stuck after arriving at Indian ports or signaling a change in destination to China. This follows reports that all Indian refiners are refusing Russian crude carried on Sovcomflot tankers to avoid breaching sanctions. The situation with the tankers suggests potential price negotiations for unloading. Goldman Sachs estimated that around 900kbpd of Russian refinery capacity is now offline, with the possibility of lasting outages or even permanent capacity loss, which could support diesel prices but have a mixed impact on crude. Meanwhile, US natural gas prices dropped, influenced by the expiry of the April contract, increased domestic and wind production, and high stockpiles, with the May Henry Hub contract down 10% over the past week.
Metals prices fell, affected by rising inventories. Copper remained largely unchanged at $8,863, while aluminium dropped by 1.1% to $2,300, nickel decreased by 1.7% to $16,655, and zinc fell by 2.22% to $2,440. A Bloomberg report highlighted Singapore becoming a "dumping ground" for excess lead and zinc, with over 64kt of lead entering the port last Wednesday, raising inventories to the highest level since 2013. A significant portion of this metal was delivered by Citigroup. The spot to 3-month spreads for lead, zinc, and copper reached record lows recently, indicating a lack of physical demand.
Investment Tip of The Day
Adopt a disciplined approach to investing by avoiding emotional decision-making, especially during market volatility. Establishing and sticking to a well-thought-out investment plan can help you navigate through periods of market uncertainty without reacting impulsively. This discipline helps in maintaining focus on long-term objectives, thereby potentially reducing the risk of making detrimental decisions based on short-term market movements.