Headlines:
- Oil down over 5% after Biden threatens biggest emergency oil reserve draw
- ICYMI: Russia-Ukraine talks to resume again on 1 April
- Japan PM Kishida: FX stability is important, sharp moves are undesirable
- OPEC+ reportedly to stick with existing oil output plan in today's meeting
- IEA to make OPEC+ oil output estimates publicly available to support transparency
- US March Challenger layoffs 21.39k vs 15.25k prior
- France March preliminary HICP +5.1% vs +4.8% y/y expected
- Germany February retail sales +0.3% vs +0.5% m/m expected
- UK March Nationwide house prices +1.1% vs +0.8% m/m expected
Markets:
- JPY leads, NZD lags on the day
- European equities lower; S&P 500 futures down 0.1%
- US 10-year yields down 4.4 bps to 2.314%
- Gold down 0.1% to $1,931
- WTI down 5.3% to $102.03
- Bitcoin down 0.4% to $47,090
In just a blink of an eye, we're already at the end of Q1 in 2022.
The session began with quieter tones as equities steadied while the bond selloff continues to take a bit of a breather. The dollar was mixed early on but crept higher as stocks turned lower and as the euro erases most of its advance from yesterday.
EUR/USD turned lower from 1.1150 to 1.1090 as European bond yields also retreated after a jump yesterday amid higher inflation figures from Spain and Germany. The drop in yields comes alongside a fall in Treasury yields across the curve as well. 10-year Treasury yields are down over 4 bps to near 2.31% currently.
USD/JPY saw an early drop to 121.35 but recovered back towards 122.20 before falling back down again to 121.60-70 in a rather choppy session. The dollar held its ground as it trades little changed against the pound but maintained an advance against the aussie and kiwi. AUD/USD is marked down 0.3% to 0.7480 while NZD/USD is down 0.6% to 0.6930 in a rather back and forth week.
Elsewhere, oil is keeping lower by over 5% still after warnings of Biden wanting to flood the market with SPR releases of as much as 1 mil bpd. WTI crude is keeping around $101 to $102 through the session. But as a reminder, releasing strategic reserves will not do anything to fix the structural issues in the oil market. So, think long-term.
Looking ahead, trading later may feature month-end and quarter-end volatility so just take note of that as we say goodbye to March.
In case you missed it, Adam rounded up the April seasonals in the market here.
