EQUITIES: Climb for EuroStoxx50 Highlights Start of Corrective Cycle

Apr-14 08:40

A short-term reversal in S&P E-Minis last week highlights the start of what appears to be a corrective cycle. The trend condition has been oversold following recent weakness and the move higher is allowing this set-up to unwind. Eurostoxx 50 futures traded in an extremely volatile manner last week and rallied sharply higher from recent lows. The climb highlights the start of a corrective cycle.

  • Japan's NIKKEI closed higher by 396.78 pts or +1.18% at 33982.36 and the TOPIX ended 21.6 pts higher or +0.88% at 2488.51.
  • Elsewhere, in China the SHANGHAI closed higher by 24.581 pts or +0.76% at 3262.808 and the HANG SENG ended 502.71 pts higher or +2.4% at 21417.4.
  • Across Europe, Germany's DAX trades higher by 496.08 pts or +2.43% at 20871.52, FTSE 100 higher by 151.38 pts or +1.9% at 8116.64, CAC 40 up 146.37 pts or +2.06% at 7252.36 and Euro Stoxx 50 up 105.65 pts or +2.21% at 4894.76.
  • Dow Jones mini up 397 pts or +0.98% at 40785, S&P 500 mini up 79 pts or +1.47% at 5471, NASDAQ mini up 333.25 pts or +1.77% at 19144.5.

Historical bullets

FED: March Economic Projections: Higher Inflation, Weaker Growth, Same Rates

Mar-14 21:28

The MNI Markets Team’s expectations for the updated Economic Projections in the March SEP are below. 

  • The unemployment rate is likely to rise slightly for 2025 alongside a downgrade in GDP growth, while the 2025 core and headline PCE inflation projections are set to rise again. Changes to later years will likely be limited, however.
  • More detail on the shift in Fed funds rate medians is in our meeting preview - we will add more color next week.



 

FED: Market Pricing Nearly 3 2025 Cuts As Conditions Tighten

Mar-14 21:25

Amid rising government policy uncertainty, sentiment among businesses and consumers has fallen sharply since the start of the year, while equities and the dollar have reversed their post-election rise. Overall, financial conditions have tightened, even if stress is not yet mounting, e.g. no major widening of credit spreads (the accompanying chart shows the Fed’s financial conditions impulse index but only through January).

  • Combined with growth fears, this has affected expectations for the Fed’s rate path, with around 18bp more cuts expected in 2025 compared with what was seen after the January FOMC. 65bp of cuts are priced for the year as a whole. 2025 cut pricing reached 71bp before the February inflation data and 76bp before the February payrolls report.
  • A rate cut is seen with near zero probability for March’s meeting, but the first full cut is just about priced for June, with a second nearly priced by September.
  • Chair Powell has no reason to endorse or refute these expectations – he’s likely to be happy with a press conference that ends with little discernable change in pricing.

 

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CANADA'S CARNEY ANNOUNCES ELIMINATION OF THE CONSUMER CARBON TAX

Mar-14 21:17
  • CANADA'S CARNEY ANNOUNCES ELIMINATION OF THE CONSUMER CARBON TAX