In a week shortened by the Easter holiday, U.S. stocks maintained strong momentum, recording their best first-quarter performance in 2019, rising for the fifth consecutive month, and closing higher in 18 of the past 22 weeks, the first time since This is a situation not seen in this market since 1989. Although the U.S. dollar remains strong, gold prices have reached another all-time high, driven by expectations of a rate cut by the Federal Reserve and heightened geopolitical tensions. Meanwhile, oil prices rose a strong 16% in the first quarter amid the latest signs that export curbs by OPEC and its allies are curbing global oil supplies.
The Fed's favorite inflation gauge was in line with expectations on Friday, and Fed Chairman Jerome Powell's speech repeated his old tone, and analysts expect the market's interest rate cut expectations to remain stable. However, with the arrival of economic data such as the U.S. non-farm report and global PMI in the coming week, as well as the outpouring of Federal Reserve officials, Wall Street will usher in new turbulence.
The following are the key points that the market will focus on in the new week (all Beijing time):
Central Bank News: Federal Reserve officials will "fire" intensively, will gold temporarily slow down?
Fed:
At 0:00 on Wednesday, FOMC permanent voting member and New York Fed President Williams hosted a discussion with Jeremy Siegel, professor of finance at the Wharton School of the University of Pennsylvania.
At 0:05 on Wednesday, 2024 FOMC voting committee and Cleveland Fed President Mester spoke on the economic outlook.
At 01:30 on Wednesday, 2024 FOMC voting committee member and San Francisco Fed President Daly participated in a fireside chat
At 21:45 on Wednesday, Federal Reserve Board Governor Bowman will deliver a speech on "Bank Liquidity, Supervision, and the Fed's Role as Lender of Last Resort"
At 0:15 on Thursday, Federal Reserve Chairman Powell spoke at the 2024 Business, Government and Society Forum hosted by the Stanford Graduate School of Business
At 22:00 on Thursday, 2026 FOMC voting committee member and Philadelphia Fed President Harker participated in a fireside chat
At 00:15 on Friday, 2024 FOMC voting committee member and Richmond Fed Chairman Barkin spoke on the economic outlook.
At 02:00 on Friday, 2024 FOMC voting committee and Cleveland Fed President Mester spoke on the economic outlook.
At 21:15 on Friday, Barkin, 2024 FOMC voting member and Richmond Fed President, delivered a speech
On Friday, the U.S. core PCE growth rate slowed to 0.3% in February from 0.4% in the previous month, in line with economists' expectations, but the monthly core PCE rate in January was revised up from 0.4% to 0.5%. Some economists believe that although inflation remains high, inflation data in line with expectations may still support the Federal Reserve to start cutting interest rates in June.
Interactive Brokers chief strategist Steve Sosnick's baseline forecast is that the PCE data will not change the Fed or market's expectations. Victoria Greene, chief investment officer of G Squared Private Wealth, also said, "There's nothing particularly surprising about (the data). Obviously this is not what the Fed wants to see, but I don't think it will catch Wall Street off guard after returning from vacation on Monday. Everyone's eyes will quickly turn to employment data."
Powell spoke after the PCE data was released. He said the latest inflation data was "broadly in line with our expectations." But he reiterated that a rate cut would not be appropriate until officials are confident that inflation is moving toward the 2% target. He echoed comments made by Fed Governor John Waller earlier this week that the Fed was in no rush to cut interest rates. Powell will have a chance to express his views next week. He will appear again in the early hours of Thursday morning. Fed officials such as Williams, Mester, Daly, Bowman, Harker and Barkin will also speak one after another during the week. Speech.
Another breakout for gold comes ahead of key inflation data. Barchart senior market analyst Darin Newsom pointed out that the rise in gold prices is a signal that investors are worried that the Federal Reserve will not be able to control inflation after it begins to cut interest rates. At the same time, gold is also well supported as a geopolitical risk hedging tool. He said, "Geopolitical concerns remain and will only continue to intensify as the U.S. election approaches in November. If the Fed starts to cut interest rates, bond yields will fall and gold will become a more attractive safe haven. assets." Julia Khandoshko, CEO of European brokerage Mind Money, said: "Gold is not expensive. The fact is that the dollar has become cheaper because governments have injected large amounts of dollars into the global economy."
Whatever is driving gold prices to record highs, Adam Button, chief currency strategist at Forexlive.com, said he expects this is just the beginning of a rally. But he added that investors should wait for a pullback before entering the market. Fxstreet analysts also said that gold bulls may stay on the sidelines, waiting for gold prices to correct, and then observe whether the rebound will continue. The 20-day moving average will then become the first level of support at $2,160, followed by $2,135, the midpoint of the ascending channel. However, if gold can hold above $2,220 and confirm that level as support, the round-figure mark of $2,300 could become the next target for the bulls.
Other central banks:
At 16:00 on Tuesday, the Reserve Bank of Australia will release the minutes of its March monetary policy meeting.
At 19:30 on Thursday, the European Central Bank released the minutes of its March monetary policy meeting.
The Reserve Bank of Australia had stayed on hold for the third consecutive time at its March meeting and gave up its tightening bias. While RBA Chairman Bullock acknowledged progress in fighting inflation, she noted that inflation remained elevated and claimed that she was not confident enough to rule out a rate hike. On Wednesday, Australia's February inflation rate remained unchanged at 3.4% for the third consecutive month, providing reason for the Reserve Bank of Australia to keep interest rates unchanged at the highest level in 12 years. Economists predict the central bank will enter an easing cycle in the third quarter, with money market expectations that a rate cut will come as early as August. For the RBA, the key inflation data will be first-quarter CPI on April 24, which will inform its economic forecasts at its May meeting.
In the eurozone, as inflation continues to cool, more and more ECB policymakers support a rate cut at the June meeting. French central bank governor Jean-Claude Le Royde said in a speech on Thursday that if inflation continues to fall faster than expected and the economy remains stagnant, the ECB may even cut interest rates at its April meeting. But ECB President Christine Lagarde previously pointed out that the ECB cannot commit to another rate cut after the first one. The minutes of the ECB's March monetary policy meeting will give investors further insight into officials' views on the short-term interest rate path.
Important data: The non-agricultural data is the finale, will the dollar bulls’ hopes be rekindled?
Monday 9:45, China’s March Caixin Manufacturing PMI
Monday 22:00, US March ISM Manufacturing PMI, US February Construction Expenditure Monthly Rate
Tuesday 16:00, Eurozone March manufacturing PMI final value
Tuesday 16:30, UK March Manufacturing PMI
Tuesday 22:00, U.S. JOLTs job vacancies in February, U.S. factory orders monthly rate in February
At 9:30 on Wednesday, China’s Caixin Services PMI for March
Wednesday 17:00, Eurozone March CPI annual rate initial value, Eurozone March CPI monthly rate
Wednesday 20:15, U.S. ADP employment numbers in March
Wednesday 22:00, US March ISM non-manufacturing PMI
At 22:30 on Wednesday, EIA crude oil inventories and strategic petroleum reserve inventories in the United States for the week to March 29
Thursday 16:00, Eurozone March services PMI final value
Thursday 16:30, UK March Services PMI
Thursday 19:30, number of layoffs by challenger companies in the United States in March
At 20:30 on Thursday, the number of initial jobless claims in the United States for the week to March 30
Friday 20:30, US March seasonally adjusted non-farm payrolls, US March unemployment rate
The U.S. job market cooled significantly in February, when the unemployment rate rose to 3.9% and wage growth slowed to 4.3% year-on-year. The market generally believes that the non-agricultural data released on Friday will show further relaxation in the labor market. The hiring rate in March is expected to decrease from 275,000 in February to 198,000, the unemployment rate will remain at 3.9%, and the average hourly wage will increase slightly. There was a rebound, rising from 0.1% to 0.3% month-on-month.
Revisions to data from previous months may also have an impact on financial markets. If the March non-farm payrolls data is stronger than expected, and there is no significant revision to past data, the US dollar may outperform other currencies and subconsciously put downward pressure on gold. If the non-farm payrolls data exceeds expectations, but past data is revised down, the dollar may not be able to profit. Financial guru Jim Cramer expects the employment data to be strong. He noted that the economy "remains healthy" and that there have not been the massive layoffs that many expected.
The CME FedWatch Tool shows that the market currently expects the probability of the Federal Reserve to cut interest rates in June to be close to 60%. If the jobs report highlights that the labor market remains tight, investors may abandon bets on a rate cut in June and may even question whether the Fed will cut rates by a total of 75 basis points this year.
While the Federal Reserve is concerned about inflation continuing to be above its 2% target, the ECB has made better progress in its anti-inflation battle. Eurozone headline CPI growth fell to 2.6% year-on-year in February and is expected to fall further to 2.5% in March, with core CPI expected to fall to 3% year-on-year. If the data shows a downside surprise, then this would support the ECB's summer rate cut, putting pressure on the euro. Conversely, the boost to the euro from strong data may be limited and short-lived, because when there is such a strong consensus within the ECB for a summer rate cut, one month's data will not be seen as having a big impact on its expectations.
Important events: OPEC+ is expected to maintain output policy unchanged, crude oil is wary of this strong resistance
OPEC and non-OPEC ministerial supervisory committee meeting
On Friday, Saudi Aramco announces its official crude oil selling price around the 5th of every month.
OPEC and its allies will meet next week. However, they have confirmed that they will extend the existing policy of cutting production by more than 2 million barrels per day until the end of June. Market observers believe that this policy is unlikely to change at least until the June meeting determines the production plan for the second half of 2024, and the focus will be on the compliance of member countries with their commitment to cut production. Russia has asked oil companies to cut production to 9 million barrels per day by the end of June.
The prospect of lower interest rates in major global economies should help demand recover as OPEC+ continues to curb supply. Commodity analysts at Standard Chartered Bank pointed out that the energy market's view of oil demand at the beginning of the new year was too pessimistic and expected that the tightening of the oil market will continue to drive up oil prices. The average price of Brent crude oil may reach US$94/barrel in the second quarter of 2024. .
Crude oil prices have been moving steadily higher since December, and the overall uptrend channel does not appear to be under any serious threat at this time. FXTM analysts pointed out that WTI crude oil remains above the 50, 100 and 200-day moving averages, but the relative strength index is approaching the 70 level, indicating that prices may be overbought. If WTI crude oil can firmly break through and close above $83/barrel, this may pave the way for it to rise to $86.40/barrel or even $90/barrel in the medium to long term. But if $83 proves to be a strong resistance level, WTI crude oil could fall back to $80/barrel and the 200-day moving average of $79/barrel.
Company financial report:
Next week will be a transition week for the new round of U.S. stock earnings season. Previously, analysts from Morgan Stanley and JPMorgan Chase warned that the rebound that has pushed U.S. stocks to new records this year will stall if corporate earnings disappoint.
A strong start to the year for U.S. stocks has some investors worried that their gains have been overdone. The S&P 500 Index (SPX) has repeatedly hit new highs. The Dow Jones Industrial Average (DJI), which represents U.S. blue-chip stocks, is currently less than 1% away from breaking through 40,000 points for the first time. The Nasdaq Index (IXIC), which has a large proportion of technology stocks, has been artificially affected. The decline in shares of smartphone giant Nvidia (NVDA) was restrained.
Technical analyst Mark Arbeter, president of Arbeter Investments LLC, wrote this week that while Nvidia's stock price may be losing some momentum, its medium-term outlook remains bullish. Citigroup strategist Scott Chronert and his team disagree. They noted that they have become more cautious about the prospects of technology stocks as the rebound in U.S. stocks will expand beyond technology stocks.
Market closing arrangements
On Monday (April 2), the Hong Kong Stock Exchange and major European exchanges were closed for Easter.
On Thursday (April 4), the A-share and Hong Kong stock markets began the Tomb Sweeping Day holiday.
Article forwarded from: Golden Ten Data