The Morning Hark - 20 Apr 2022
The Morning Hark - 20 Apr 2022
Today’s focus ……..Kashkari kicked in with some hawkish comments and we see Daly, Evans, and Bostic later. CAD CPI at 13.30 BST will be watched following BOC hawkishness last week.
Daily roundup - all prices are at 7.50 BST with changes reflecting movement from midnight GMT
Oil - Both Brent and WTI futures higher on the day at 108.46 and 103.10 respectively after their decent rally yesterday. Oil has been volatile again post Easter with news from France yesterday that an oil embargo was close. Throw in the OPEC+ story showing production was below March targets and mix that with fears of an economic slowdown and you have something for everyone.
We get the IEA inventory numbers later at 15.30BST.
EQ - Asian indices mixed with Nikkei and Hang Seng both up around 1% at 27.200 and 21,500 respectively while the Kospi is basically unchanged.
The US indices are down smalls overnight around our noted supports at 4,400 for the S&P and 14,000 for the Nasdaq.
Gold - Gold small down again on the day at 1942.
FI – US real yields turned positive yesterday for a short while. US 10y yield currently sitting at 2.94. JGB yield was at 0.25% today with BOJ performing unlimited buying. There was some talk of something “extra” from the BOJ, but this failed to materialise.
FX – USDJPY is the obvious story but is so last week. Watch out for the CNH which could be giving JPY a run for its money. The PBOC left LPR unchanged overnight, but the onshore Yuan still breached the 200 DMA following the move by its offshore cousin yesterday. Looks like there could be further weakness in CNH even with the authorities confirming good covid numbers, but we need to bear in mind there are still 11.9M Shanghai residents in full lockdown.
USDJPY pushed up to new highs in early trading 129.40 but the USD came under some selling pressure, and we capitulated to 128.06 low. Currently sitting around 128.65
The Antipodeans are the best performers today with AUD up 0.6% at 0.7415, NZD sits at 0.6762
Others - Bitcoin back up to 41,500 with Ethereum to 3,090
The MOVE index continued its gap widening with the VIX today. VIX down 3.6% and MOVE up 0.35%.
📅⠀The main highlights for the day in terms of data and speakers:
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Canadian March CPI - CPI print with expectations for headline YoY at 6.1% (previously headline YoY at 5.7% and core at 4.8%) released today at 13.30 BST.
Fed speakers – Kashkari spoke overnight and called out inflation as being “much too high”. Today we get Daly, Evans, and Bostic. The first two at 16.30 BST are more interesting than Bostic at 18.00 BST.
We highlight a twitter thread below from Jim Bianco and his thoughts on the BOJ current policy. An interesting view and it’s only a two-minute read.
Good luck.
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📚⠀Articles discovered on Harkster exploring some of the themes above in more depth:
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French Elections
German and Russian gas
ZeroHedge - Explaining Germany's Russian Gas Problem
JGB/YCC = Stablecoin
Jim Bianco - Twitter Thread
🔥⠀Top 5 trending links on Harkster yesterday:
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Alhambra Partners - Not Good Goods
Brent Donnelly - Trade 11: Sentiment and positioning
BNY Mellon - Short Thoughts
SGH Macro Advisors - Tim Duy’s Fed Watch, 4/18/22
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