Market movers today
- The key release today is the US Michigan survey of consumer confidence. Although confidence has improved in 2021, the indicator has stalled in recent months as US consumers have grown more wary about their current prospects. Another interesting point in the release will be the inflation expectation gauge given the rise in actual US inflation in recent months.
The 60 second overview
Macro: US PPI inflation significantly beat the consensus expectation yesterday. Hence, the steep rise in US prices continues as Fed has allowed inflation to overshoot 2% amid the recovery of the economy.
Commodities: Commodity markets rebounded further yesterday and have now recovered the lost ground from the start of the week. Hence, Bloomberg’s commodities index rose back to level from last week.
Equities: Equity markets grinded mostly higher on Thursday with another set of record closing levels. The last five days of value preference flipped and investors bought into health care and tech. Energy and materials were among the weaker groups. In all, S&P 500 up 0.3%, Nasdaq 0.4%, Russell 2000 -0.2% and Dow unchanged. The week is concluding with mostly muted moves in Asia. US futures are flat.
FI: After an uneventful Wednesday session, we got another uneventful Thursday trading session. With no news on the wires and no supply EGBs and UST were trading in a tight range, favouring positive carry positions. BTPs-Bund spreads are closing in on the 100bp mark.
FX: USD regained some strength yesterday after US PPI inflation beat expectations and triggered a rise in US interest rates. It was a mixed picture for commodity currencies with NOK rising higher and AUD, CAD, and NZD falling back.
Credit: Sentiment took a turn for the better in credit markets yesterday where iTraxx Xover tightened 4bp (to 232bp) and Main 0.6bp (to 46bp). Cash bond moves were more modest, with HY tightening 1bp and IG unchanged.
