Global Market Quick Take: Europe – April 13, 2023 Global Market Quick Take: Europe – April 13, 2023 Global Market Quick Take: Europe – April 13, 2023

Global Market Quick Take: Europe – April 13, 2023

Macro 7 minutes to read
Saxo Strategy Team

Summary:  US equities turned back lower and closed down on the session after trying to rally in the wake of the March US CPI report as treasury yields chopped aimlessly. The US dollar slumped, with EURUSD testing above 1.1000 for the first time since February and GBPUSD eyeing the 1.2500 level. Oil prices rose sharply and cleared local resistance after the recent OPEC+ production cut.

What is our trading focus?

US equities (US500.I and USNAS100.I) lower after choppy reaction to CPI

US equities jumped higher on the slightly softer-than-expected March CPI headline, but then chopped back lower as a dip in Treasury yields failed to sustain. The Nasdaq 100 index underperformed the broader market, dipping over 100 points to close at a two-week low near the 21-day moving average just below 13,000. The S&P 500 closed less than a half-percent lower and within the recent range, although the reversal from the intraday jump looks ugly (with intraday volatility likely aggravated by zero-day-to-expiry option trading over the US CPI release.

FX: USD tilts lower after US CPI data. AUD firms on jobs data.

The US dollar chopped around in the wake of the March US CPI release, which failed to provide any surprise in the core data (more below), but ended the day lower as EURUSD tested above 1.1000 for only the second time in the last year, and GBPUSD approached important cycle resistance near 1.2500. Fed hike expectations/probabilities for the coming two meetings edged ever so slightly lower. Overnight, the Aussie got a lift from stronger than expected March employment data, with a second month in a row of strong full time payrolls growth as the unemployment rate remained pinned near the cycle low at 3.5%.

Crude oil surges clear of recent resistance on supply concerns

Brent Crude oil prices surged above $87/barrel for the first time since January, breaking free of the local resistance after the prior surge on OPEC+ announcing a production cut the weekend before last. Lower exports from Russian ports last week have been in focus in recent days, and a disruption of a pipeline supplies in Iraqi Kurdistan may also have weighed. The WTI crude oil contract cleared $83/barrel overnight for the first time since December. OPEC will issue it monthly report today.

Gold (XAUUSD) and silver choppy on March CPI release

The US CPI report (see below) didn’t generate a sufficiently large surprise to serve as a major catalyst for gold prices, which tried to surge on the initial dip in US treasury yields and the US dollar before chopping back lower and then ending the day only slightly higher and still below the recent 2,032 high, with the 2,000 level maintaining as the USD remains on its back foot. Silver managed to hold its new gains slightly better, staying well above $25/oz after the choppy reception of the US CPI data.

US Treasury yields choppy on CPI data (TLT:xnas, IEF:xnas, SHY:xnas)

US treasury market reaction to the March CPI data (see below) was mixed, with a sharp rally yielding to a choppy retracement and the 2-year this morning only coming in a few basis points lower at 3.98% after a dip to 3.87% after the CPI data yesterday. The longer-end of the US yield curve underperformed and the results from the 10-year auction were poor with notes being awarded at 2bps cheaper than the when-issue trading level as of the deadline of the auction. The yield on the 10-year notes closed 4bps lower at 3.39%. The 2-10-year yield curve steepened by 4bps to -57.

What is going on?

US March CPI: core inflation in-line with expectations

The market noted that US March headline CPI came in slightly cooler-than-expected while the core numbers were in-line with expectations. Headline CPI M/M cooled to 0.1% (exp. 0.2%, prev. 0.4%), while the annual pace slowed to 5.0% (prev. 6.0%, exp. 5.1%); core M/M rose 0.4% (prev. 0.5%, exp. 0.4%) and Y/Y 5.6% (prev. 5.5%, exp. 5.6%). The initial reaction was dovish as equity market futures rallied and Fed pricing for a May rate hike tumbled but the reaction was later mostly reversed. Fed futures are still pricing in a 70% probability of a 25bps rate hike in May with about 65bps rate cuts (from an assumed hike) then priced in for the rest of the year. The drag on inflation has chiefly come from a slight deceleration in the rise in shelter prices and sharply lower energy and used car prices.

FOMC minutes raise credit concerns, still lean for hike.

The FOMC minutes showed that members are divided on the outlook, with some emphasizing the need to be flexible as growth risks have increased while others still worried about upside risks to inflation. Still, the committee leaned towards another rate hike after the March meeting, even though concerns of a credit crunch did weigh on the outlook and Fed staff advisers forecasting a “mild recession” later this year. The banking sector concerns have cooled further since the meeting, and CPI and jobs data have remained firm, sustaining expectations that the Fed may not yet have peaked rates for the cycle, although the 18-month forward assumption is that the Fed will cut some 150 basis points from the current level.

Bank of Canada stands pat at 4.50% as expected

The Bank of Canada left rates unchanged at 4.5% as expected whilst maintaining language it is prepared to do more on rates if needed to bring inflation back to target. The average GDP forecasts were revised higher for 2023, but down for 2024, while the 2025 growth is seen picking up to 2.5%. On inflation, the 2023 average CPI forecast was revised lower to 3.5% from 3.6%, while 2024 was left unchanged at 2.3% with 2025 inflation seen at 2.1%. Commentary included some pushback on the pricing of rate cuts for this year, but it wasn’t enough to change the market pricing. USDCAD trades just above the 200-day moving average and the near the local pivot low of 1.3407.

China’s exports saw surprise surge in March

China reported a 14.8% YoY gain in exports in USD terms, the first time exports rose in six months, in part on the clearing of disruptions from the country’s former zero-tolerance policy on Covid. The strong surge was a surprise to consensus expectations of a –7% fall. With imports falling slightly YoY, the Trade Balance hit a huge surplus of $88.2 billion.

LVMH shares set to surge today on Q1 sales surge

The European luxury retailer reported a strong surge in Q1 sales, led by fashion and leather goods rising 18%, nearly twice the pace of growth expected from analysts. The company reported strong growth in sales in Asia after China lifted Covid restrictions. The American depository receipts surged 3.4% on the news yesterday.

German chemical giant BASF reports much higher profit than expected.

The company reported Q1 profits of EUR 1.93 billion, handily beating expectations of EUR 1.78 billion, although still a drop of 32% versus a year ago. Sales also beat expectations despite cutbacks of production for some of its more energy-intensive products

What are we watching next?

Last US data points ahead of May 3 FOMC meeting

The US March CPI data yesterday offered little to shift expectations for the May 3 FOMC meeting as the market still leans for perhaps one more Fed rate hike there, followed by rate cuts to begin as soon as September. Ahead of the May 3 FOMC meeting, we will get three more weekly initial jobless claims prints, starting with today’s, the March PPI also out today, and the Retail Sales report Friday. The Fed’s favoured inflation gauge, the PCE inflation data, will be out on April 28 (looking sticky at 4.6% in February after the two prior readings were within 0.1% of that number. The March Fed forecasts see PCE core dropping to 3.6% by the end of this year). We will have a look at both the ISM Manufacturing (May 1) and ISM Services survey (May 3) ahead of the Fed’s decision.

Earnings to watch

The Q1 earnings season kick-off on Friday is dead ahead, as three of the largest US banks are set to report. S&P 500 12-month forward EPS estimates have risen 1.2% since late February, suggesting analysts are less worried about credit conditions, the recent banking crisis, and the slowing economy.

Analysts expect JPMorgan Chase to report Q1 net revenue of $39.7bn up 18% y/y and EPS of $3.39 up 21% y/y, but with the recent banking crisis the outlook is more important and especially JPMorgan’s comments about funding costs and loan growth outlook. Delta Air Lines earnings today are also worth watching for insights into business traveling, the airlines’ most profitable segment. Analysts expect Q1 revenue growth of 28% y/y and EBITDA of $1.17bn up from a loss of $282mn a year ago.

This week’s earnings releases:

  • Thursday: Fast Retailing, Tesco, Fastenal, Delta Air Lines
  • Friday: JPMorgan Chase, UnitedHealth, Wells Fargo, BlackRock, Citigroup, Progressive, PNC Financial Services

Economic calendar highlights for today (times GMT)

  • 1230 – US Mar. PPI
  • 1300 – UK Bank of England Chief Economist Huw Pill to speak
  • 1430 – US Weekly Natural Gas Storage Change
  • 1700 – US Treasury to auction 30-year T-Bonds

Quarterly Outlook 2024 Q3

Sandcastle economics

01 / 05

  • Macro: Sandcastle economics

    Invest wisely in Q3 2024: Discover SaxoStrats' insights on navigating a stable yet fragile global economy.

    Read article
  • Bonds: What to do until inflation stabilises

    Discover strategies for managing bonds as US and European yields remain rangebound due to uncertain inflation and evolving monetary policies.

    Read article
  • Equities: Are we blowing bubbles again

    Explore key trends and opportunities in European equities and electrification theme as market dynamics echo 2021's rally.

    Read article
  • FX: Risk-on currencies to surge against havens

    Explore the outlook for USD, AUD, NZD, and EM carry trades as risk-on currencies are set to outperform in Q3 2024.

    Read article
  • Commodities: Energy and grains in focus as metals pause

    Energy and grains to shine as metals pause. Discover key trends and market drivers for commodities in Q3 2024.

    Read article


The Saxo Bank Group entities each provide execution-only service and access to Analysis permitting a person to view and/or use content available on or via the website. This content is not intended to and does not change or expand on the execution-only service. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Rules of Engagement and (v) Notices applying to Saxo News & Research and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Bank Group by which access to Saxo News & Research is gained. Such content is therefore provided as no more than information. In particular no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Bank Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Bank Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on Saxo News & Research or as a result of the use of the Saxo News & Research. Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Bank Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. Saxo News & Research does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of our trading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication under relevant laws.

Please read our disclaimers:
Notification on Non-Independent Investment Research (
Full disclaimer (
Full disclaimer (

Saxo Bank (Schweiz) AG
The Circle 38

Contact Saxo

Select region


All trading carries risk. Losses can exceed deposits on margin products. You should consider whether you understand how our products work and whether you can afford to take the high risk of losing your money. To help you understand the risks involved we have put together a general Risk Warning series of Key Information Documents (KIDs) highlighting the risks and rewards related to each product. The KIDs can be accessed within the trading platform. Please note that the full prospectus can be obtained free of charge from Saxo Bank (Switzerland) Ltd. or the issuer.

This website can be accessed worldwide however the information on the website is related to Saxo Bank (Switzerland) Ltd. All clients will directly engage with Saxo Bank (Switzerland) Ltd. and all client agreements will be entered into with Saxo Bank (Switzerland) Ltd. and thus governed by Swiss Law. 

The content of this website represents marketing material and has not been notified or submitted to any supervisory authority.

If you contact Saxo Bank (Switzerland) Ltd. or visit this website, you acknowledge and agree that any data that you transmit to Saxo Bank (Switzerland) Ltd., either through this website, by telephone or by any other means of communication (e.g. e-mail), may be collected or recorded and transferred to other Saxo Bank Group companies or third parties in Switzerland or abroad and may be stored or otherwise processed by them or Saxo Bank (Switzerland) Ltd. You release Saxo Bank (Switzerland) Ltd. from its obligations under Swiss banking and securities dealer secrecies and, to the extent permitted by law, data protection laws as well as other laws and obligations to protect privacy. Saxo Bank (Switzerland) Ltd. has implemented appropriate technical and organizational measures to protect data from unauthorized processing and disclosure and applies appropriate safeguards to guarantee adequate protection of such data.

Apple, iPad and iPhone are trademarks of Apple Inc., registered in the U.S. and other countries. App Store is a service mark of Apple Inc.