Morning Brew JApril 2 2024

Good morning,

After Fridays Inflation numbers were in line with expectations, yesterdays ISM PMI rose to above 50 and caused the narrative of imminent rate cuts to crumble. 10 Year US Yields are above 4.30. Rate traders’ price in slightly less than three cuts by year end – 65 BPS are being traded for the Fed, the ECP remains at -90 BPS.

The US Dollar gains and reaches the highest level this year, the USD Index breached 105 and EURUSD 107.30, GBPUSD 1.2540 and USDJPY rises to the highest since the burst of the Japanese Bubble economy at 151.75. Japanese Finance Minister Suzuki said Japan was ready to act against excessive exchange-rate volatility.

Gold, Silver and oil remain strong on rising tensions in the middle east – the Iranian consulate was struck by a detonation and 5 employees of an aid organization were killed in an air strike. Gold is 2252, Silver 25.32 and Oil 84.20.

Indexes seem stalling near the highs and are looking for clues, the US500 is 5233, GER40 18500 and the US Tech 100 Nas 18260.

Donald Trump deposited enough collateral to avoid a seizure of his NY assets while the shares of his social Media company fell 36% off the high. UBS announced a share buyback to the tune of USD 2 bio. Microsoft will unbundle Teams and Office due to possible antitrust issues.

The Start of the quarter seems undecided but we will have a lot of input this week as seen below, next to the planned events, the middle east needs watching and the saber rattling by Russia as well.

Key Events:

Tuesday
- Data International PMI, DE inflation, Mester Speaks, Tesla Q1 deliveries
Wednesday
- Data International PMI, EU Inflation, ADP Payrolls, ISM Services PMI, Powell speaks,

Thursday
- Data More PMI, initial Jobless claims, Barkin speaks,

Friday
- Data:  De Industrial Orders, US Nonfarm Payroll, Unemployment Rate