DAILY MARKET ANALYSIS 10-03-2022
are undoubtedly volatile days for the financial markets. The US consumer price
index rose 0.8%MoM in February, which leaves the annual rate of inflation at
7.9%, a new 40 year high. Food rose 1% MoM and energy was up 3.5% MoM—so
stripping this out this gives core inflation of 0.5% MoM and 6.4% YoY. All this
is exactly in line with market expectations.
Strong US equity gains yesterday helped lift Asia Pacific markets today.
led the move with a nearly 4% gain in the Nikkei.
stocks remain under selling pressure, with the three major indexes trading
in the negative territory, although off their daily lows. Worries about US
inflation sent futures on the Dow Jones, S&P 500, NASDAQ, and Russell 2000,
as well European equities lower in trading on Thursday.
stocks fell Thursday, as the region’s central bank surprised with plans for
a faster exit from its bond-buying program, while a lack of progress on
negotiations between Ukraine and Russia also weighed on investors.
Dollar Index regains some composure and reclaims the 98.00 mark and above
EUR/USD rose sharply after the European Central Bank (ECB) announced that it will end
the Asset Purchase Program (APP) in the third quarter. However, policymakers
noted that if “the medium-term inflation outlook changes and financing
circumstances become incompatible with further progress toward our 2% target,
we will alter our net asset purchase schedule in terms of magnitude and/or
length. The pair reversed its direction and started to decline toward 1.1000 on
ECB President Lagarde's cautious comments.
GBP/USD rose toward 1.3200 but lost its traction in the early American session. The
risk-averse market environment, which is reflected by falling US stock indexes,
is helping the dollar gather strength and the pair trades in the negative
territory below 1.3150.
Yen rose above 116 for the first time since Feb.
The AUD/USD and NZD/USD were proving resilient, while most of the other major
currencies were softer. Emerging market currencies were mixed.
yield on 10-year Treasury note briefly hits 2% as yields climb following
hot CPI report
10-year yield Bund surged to an over 3-week high of 0.27%, clawing back all
losses from a sell-off due to the war in Ukraine, after a surprisingly hawkish
ECB monetary policy decision.
10-year yield rose toward 1.5%, the highest in near three weeks, as
investors weighed stagflation concerns and rate hike prospects.
Gold peaked near $2070 on Tuesday, edged lower today but then recovered slightly,
after yesterday's 2.7% slide.
Oil recovered after yesterday's 13.2% plunge, though we expect the gains to be
short-lived and more volatility.
Ahead - Friday 11/03/2022
UK GDP figures are released.
Canada releases its employment data
Michigan consumer sentiment figures