US Indices closed flat/down on Wednesday as rising oil prices limited any rebound from Tuesday’s late-staged selloff. The IEA confirmed it is to release 400 million barrels of oil into the market, but the timing depends on each country, while there is still plenty of uncertainty about the Strait of Hormuz, with Trump attempting to get shippers to sail the Strait again, but he is being met with resistance due to safety concerns, particularly amid reports of mines being placed there. There had also been reports suggesting Iran aspired to attack California with drones in response to the war, which also briefly hit sentiment and lifted oil prices. The move higher in crude saw yields move higher across the curve while there was likely dealer concession taking place ahead of the 10-year auction this afternoon, following the weak 3-year supply on Tuesday. Meanwhile, the US CPI data, although in line with expectations, saw the PCE components lean hot – also adding to downward pressure in Treasuries. In FX, the Dollar was bid as yields moved higher while the Euro was in focus after ECB’s Kazimir touted a sooner than expected rate hike, but not at the next meeting. AUD outperformed on more hawkish RBA bets with Westpac now expecting an RBA hike in March. Gold prices were marginally lower, while silver lagged, with bitcoin rising back above USD 70k. Headline inflation rose 0.267% M/M, in line with the 0.3% consensus and up from the prior 0.171%. The annual rate remained at 2.4% Y/Y, in line with expectations. Core inflation rose 0.216% M/M, in line with the 0.2% forecast, and cooler than the prior 0.295%. The annual rate rose at a rate of 2.5% Y/Y, in line with expectations and matching the prior reading. Core goods prices were little changed (0.08% vs 0.04%), while core services cooled to 0.27% M/M from 0.39% – a welcome sign for those at the Fed concerned about this area of pricing. Super core rose to 2.74% Y/Y from 2.67%. The data continues to show inflation is sticky around these levels, though ahead, analysts see potential upside risks amid the Middle East conflict, the rising oil prices and the risks of severe supply chain disruptions at the Strait of Hormuz. Meanwhile, Wall Strret Journalist and Fed watcher Timiraos highlighted that the very favourable data imputation in the October report, due to the government shutdown, unwinds after March. Pantheon Macroeconomics noted that CPI components feeding through to the core PCE deflator were hot and it expects the core PCE inflation at 0.4% M/M in February, after rising 0.4% in January (January PCE is due Friday). Overall, the report is unlikely to change the Fed’s stance for now, as policymakers prefer to wait and see the impact of the war in the Middle East and tend to look through one-off energy price rises. Nonetheless, Pantheon wrote that “the Fed’s rules of thumb imply that the 30% increase in oil prices since February will lift the core CPI by just 0.15ppts”. Elsewhere, Oil surged 4.5% rebounding from some of Tuesday’s 11% fall while Gold closed basically flat.
To mark my 3325th issue of TraderNoble Daily Commentary I am offering a special 2-Year Rate of Euro 2750 for my Platinum Service which includes 1 to 4 updated emails throughout the trading day to demonstrate this value, a monthly subscription over the same period would cost 4440 euro in total This offer represents a 38% discount and is open to both new and existing members. If anyone is interested in this offer can you please email me on bryan@tradernoble.com for details
For anyone following my Platinum Service it made 60 points yesterday and is now ahead by 2758 points for March having closed February with a strong gain of 5482 points after ending January with a gain of 4757 points, having closed December with a gain of 2599 points, after ending the month of November with a gain of 4542 points, after ending October with a nice gain of 5110 points after closing September with a gain of 3774 points whe ending August with a gain of 3362 points after closing July with a gain of 3753 points after closing June with a gain of 3530 points, having closed May with a gain of 3606 points, after closing April with a gain of 7685 points after closing March with a gain of 2254 points while closing February with a gain of 4180 points. January ended with a gain of 2768 points while 1997 points were gained in December. October ended with a gain of 2179 points, after closing September with a gain of 4402 points, following a loss of 301 points in August. July gained 1908 points while June saw a gain of 2074 points. The Platinum Service made a record 9619 points in October 2022. Since I started this New Platinum Service in June 2015 it has averaged a monthly gain of over 2300 points. I have a YouTube Channel which contains recent interviews I have given This can be viewed by clicking HERE Please subscribe to this for new interview notification
Recent Comments