- US stocks were choppy and settled lower after paring some of the strength seen in the wake of Wednesday's FOMC and with a deluge of central bank updates on Super Thursday although the decisions generally failed to move the needle by much. The data releases were ultimately mixed as initial jobless claims printed largely in line with estimates but continued claims rose above forecast, while Philly Fed beat on the headline, but the internals were more varied.
- USD extended on gains amid fluctuations seen in stocks and despite mixed data releases in which Philly Fed and Existing Home Sales topped forecasts but the Leading Index was weaker than expected and Jobless Claims increased albeit with Initial Jobless Claims slightly below forecast. There was a slew of central bank rate decisions from across the pond but had little sway on the greenback, while the US calendar is fairly quiet on Friday with only Fed's Williams and Waller due.
- Looking ahead, highlights include New Zealand Trade Data, Japanese National CPI, Malaysian CPI, Supply from Australia.
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LOOKING AHEAD
- Highlights include New Zealand Trade Data, Japanese National CPI, Malaysian CPI, Supply from Australia.
- Click for the Newsquawk Week Ahead.
US TRADE
- US stocks were choppy and settled lower after paring some of the strength seen in the wake of Wednesday's FOMC and with a deluge of central bank updates on Super Thursday although the decisions generally failed to move the needle by much. The data releases were ultimately mixed as initial jobless claims printed largely in line with estimates but continued claims rose above forecast, while Philly Fed beat on the headline, but the internals were more varied.
- SPX -0.22% at 5,663, NDX -0.30% at 19,678, DJI -0.03% at 41,953, RUT -0.65% at 2,069.
- Click here for a detailed summary.
TARIFFS/TRADE
- EU's Trade Commissioner Sefcovic said the Commission is considering delaying the first set of counter-tariffs against the US to mid-April.
- China's Vice Commerce Minister said China and European countries should strengthen trade and investment cooperation, uphold WTO rules and respond to external challenges.
NOTABLE HEADLINES
- White House Press Secretary said US President Trump has the right to criticise the Fed decision and Trump is clear he wants lower rates.
DATA RECAP
- US Philly Fed Business Index (Mar) 12.5 vs. Exp. 8.5 (Prev. 18.1)
- US Philly Fed Prices Paid (Mar) 48.3 (Prev. 40.5)
- US Philly Fed New Orders (Mar) 8.7 (Prev. 21.9)
- US Philly Fed Employment (Mar) 19.7 (Prev. 5.3)
- US Leading Index Change MM (Feb) -0.3% vs. Exp. -0.2% (Prev. -0.3%, Rev. -0.2%)
- US Existing Home Sales (Feb) 4.26M vs. Exp. 3.95M (Prev. 4.08M, Rev. 4.09M)
- US Initial Jobless Claims w/e 223.0k vs. Exp. 224.0k (Prev. 220.0k, Rev. 221k)
- US Continued Jobless Claims w/e 1.892M vs. Exp. 1.887M (Prev. 1.87M, Rev. 1.859M)
FX
- USD extended on gains amid fluctuations seen in stocks and despite mixed data releases in which Philly Fed and Existing Home Sales topped forecasts but the Leading Index was weaker than expected and Jobless Claims increased albeit with Initial Jobless Claims slightly below forecast. There was a slew of central bank rate decisions from across the pond but had little sway on the greenback, while the US calendar is fairly quiet on Friday with only Fed's Williams and Waller due.
- EUR trickled lower beneath the 1.0900 territory, with a slew of ECB speakers providing little to support the currency.
- GBP marginally softened after failing to sustain the 1.3000 status but with the downside cushioned after stronger-than-expected UK jobs data and the BoE decision to hold rates at 4.5% which was made through an unexpected 8-1 vote split with BoE's Mann switching to the unchanged camp.
- JPY pared some of its gains but remained at a 148.00 handle against the greenback amid the flimsy risk tone.
- BoC Governor Macklem said they need to set a policy that minimizes the risk of errors and that means being less forward-looking than normal, while that may also mean acting quickly when things crystallise and need to be flexible and adaptable.
- South African Repo Rate (Mar) 7.5% vs. Exp. 7.5% (Prev. 7.5%), decision was made by a 4-2 split with 2 favouring a 25bps cut, while the forecast continued to see rates stabilising at a neutral level of about 7.25%. Furthermore, SARB assessed that risks to domestic growth are seen as being to the downside, while inflation appears contained and risks are two-way, over the medium-term balance is to the upside.
- SNB cut its Policy Rate by 25bps to 0.25%, as expected and said it is "prepared to intervene on the foreign exchange market as necessary".
- Riksbank left rates unchanged at 2.25%, as expected, and sees rates at current levels going forward.
- CBRT raised the overnight lending rate by 200bps to 46%, while the policy rate (one-week repo auction rate) and overnight borrowing rate were kept at 42.5% and 41%, respectively.
- Turkish opposition leader Ozel said his party will nominate the detained Istanbul Mayor as a candidate for future presidential election even if he is arrested, but there will be another candidate if he cannot run legally.
FIXED INCOME
- T-notes settled higher but with two-way price action amid the choppy risk environment.
COMMODITIES
- Oil prices gained and closed just off session highs with support seen following fresh US sanctions targeting the network supporting Iran’s oil exports.
- OPEC+ said seven nations including Russia, Iraq, and Kazakhstan issued new plans to compensate for pumping above quotas, while monthly compensation would represent cuts of between 189k-435k bpd and the new plan for compensation cuts runs to June 2026.
- Colombian oil pipelines Bicentenario and Cano Limon-Covenas suspended oil pumping due to explosive attacks, according to Reuters citing a client.
- Slovakia received a waiver extension from the US for gas payments to Russia and Turkey also received a waiver extension from the US until May for gas payments to Russia.
GEOPOLITICAL
MIDDLE EAST
- Qatari PM and Egypt's Foreign Minister stressed the necessity to strengthen joint efforts for implementing three phases of the Gaza ceasefire deal.
- US Treasury announced new Iran-related sanctions against the network supporting Iran’s oil exports, targeting a Chinese individual (Shandong Shouguang Luqing Petrochemical Co CEO) and crude oil tankers (19 entities/vessels in total).
- Iran’s Foreign Minister said US President Trump’s letter is 'more of a threat', but added that there are opportunities and Tehran will contemplate both.
- Israel and the US will hold strategic talks on the Iranian nuclear issue at the White House next week, according to Axios's Ravid.
- WSJ's Norman said Iran and E3 were supposed to meet in the last few days but this was postponed and appears to have been postponed by Iran.
RUSSIA-UKRAINE
- Ukrainian President Zelensky said Ukraine-US teams are to meet in Saudi on Monday and it would be a separate meeting from Russia-US teams, while he also said that President Trump has not raised the status of Russian-occupied Crimea during talks with him. It was separately reported that Zelensky said "sanctions must remain imposed on Russia until it begins its withdrawal from Ukraine" and he asked EU allies for at least EUR 5bln for artillery shells as soon as possible.
- Kremlin aide said Russia-US talks are to be held in Saudi Arabia on March 24th, according to Interfax.
- SBU official said Ukrainian drones hit the Russian Engels field overnight which resulted in a fire and explosion, while a Russian Foreign Ministry spokeswoman said Ukraine's drone attack on Russia's oil facility is specially prepared provocation by Kyiv and the attack is aimed at disrupting peace initiatives.
- Germany, Italy, Poland, UK, and Canada leaders to meet in Paris next week to discuss Ukraine, according to Bloomberg.
ASIA-PAC
NOTABLE HEADLINES
- Chinese Premier Li said local governments should strive to provide better policy support and development environment for private firms and must insist on opening up and exploring diversified markets with great efforts, while he added the foreign trade situation is complicated and grim.
EU/UK
NOTABLE HEADLINES
- BoE kept rates unchanged at 4.50%, as expected, in an 8-1 vote (exp. 7-2) in which Dhingra voted for a 25bps rate cut and Mann moved into the unchanged group while the BoE maintained the view that "a gradual and careful approach to policy restraint remains appropriate" and reiterated monetary policy is not on a preset course over the next few meetings.
- BoE's Governor Bailey said there is no sign yet of job cuts in early indicators, while they have to wait to see evidence of falling inflation and have to be quite careful. Bailey added he is watching very carefully for any signs of an increase in redundancies, not seen in early indicators.
- ECB's Lagarde said ECB analysis suggests that a US tariff of 25% on imports from Europe would lower Euro Area growth by around 0.3ppts in the first year and a European response in the form of raising tariffs on US imports would further increase this to about half a percentage point, while she reiterated a data-dependant approach. Lagarde also said the analysis of bond yields shows an increase in inflation expectations is not significant.
- ECB's Centeno does not see prices rising significantly as a result of the trade war and said the tariff war may end up having a negative impact on prices.
- ECB's Holzmann reiterated the idea of a tenfold hike in minimum reserves.
- ECB's Knot said he is completely open-minded about the April meeting and there are many unknowns, while uncertainty about the direction of inflation is higher than it has been in a long time and it is very hard to predict where interest rates will go as it is hard to say where inflation will go. Knot also said they have almost mastered the inflation problem and are almost at the level of neutral interest rates.
- ECB's Villeroy said he is not worried about inflation and that the ECB has a margin for cuts, while the inflation impact of Trump policies is small for Europe.
- ECB's Lane said the case for a CBDC is especially strong for a monetary and financial destiny, against a backdrop of increasing geopolitical fragmentation.
DATA RECAP
- UK Employment Change (Jan) 144k vs. Exp. 95k (Prev. 107k)
- UK ILO Unemployment Rate (Jan) 4.4% vs. Exp. 4.4% (Prev. 4.4%)
- UK Avg Earnings (Ex-Bonus) (Jan) 5.9% vs. Exp. 5.9% (Prev. 5.9%)
- German Producer Prices MM (Feb) -0.2% vs. Exp. 0.1% (Prev. -0.1%)
- German Producer Prices YY (Feb) 0.7% vs. Exp. 1.0% (Prev. 0.5%)
