Market Recap: Has US avoided recession in 2023? ECB also on tap


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Economic Indicators & Central Banks:

  • Treasuries were weak with yields extending higher still, hit by the double whammy of stronger than expected PMI data and an ugly 5-year auction.
  • The healthy rally on Wall Street also weighed, though stocks trimmed gains into the close.
  • China bourses continued to rally after the PBOC stepped up support measures yesterday by cutting reserve requirements, while hinting at possible rate cuts.
  • ECB Preview: The central bank is widely expected to keep policy settings unchanged and stick with a wait-and-see stance for now, which means rate cuts are not on the immediate agenda.

Market Trends:

  • Hang Seng and CSI 300 already staged a late rally yesterday and continued to move higher today, with gains of 1.8% and 2.0% respectively.
  • European futures are in the red, however, as the ECB meeting comes into view.
  • US futures are slightly higher on the anticipation of US GDP later on which could provide clues as to where US rates might be headed.
  • Tesla’s profits plummet! Tesla (-5.93% after hours) posted a 23% decline in profits for 2023, its 1st annual decline since 2017!
  • Microsoft becomes 2nd company ever to top $3 trillion valuation on AI-driven rally. Apple remains at the top.
  • FAA halts Boeing 737 MAXproduction expansion. Boeing -1.32% after hours.

Financial Markets Performance:

  • The USDIndex slipped to a session nadir of 102.52 but bounced back to 103.25 to close over the 103 level for a 7th straight session.
  • EURUSD is steady at 1.0880. The USDJPY regained some ground after hints at rate rises in Japan triggered selling in the Japanese government bond market. It remains below 148.
  • USOIL was up 1.45% to $75.44 per barrel amid ongoing geopolitical risks and following a bigger than expected US inventory draw.
  • Gold was down -0.83% to $2012.50 on the stronger PMI data and further trimming in rate cut bets. Markets have reined in expectations for early rate cuts in the US and Europe, and BoJ governor Ueda yesterday hinted that the exit from the negative interest rate environment is coming into view. That should keep gold range bound for now.

Click here to access our Economic Calendar

Andria Pichidi

Market Analyst

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