Daily Digest:
w/c 4 March 2024: US stock averages higher again to end the week, prodding at record levels; upcoming week's focus on the Fed's Powell testimony before Congress and the US Employment report

Even more hawkish Fed sends bonds and stock averages lower


Macroeconomic/ geopolitical developments

  • Hawkish comments from Lael Brainard of the Fed (usually more of a dove) regarding rate hikes and balance sheet normalization saw Bonds yields surge last Tuesday, with growth/ tech stocks leading the US stock averages lower.
Lael Brainard
  • This was affirmed by Wednesday’s FOMC Meeting Minutes, which reinforced a more hawkish threat from the Fed inro 2022.
  • The financial markets have continue to be less impacted by the Russian invasion of Ukraine, and despite some atrocities in the wake of the Russian shift away from Kyiv, there has been a lack of any significant escalation.
Ukraine Russia
  • The European Union (EU) united with the U.S. in imposing further sanctions on Russia, notably on Coal.

Global financial market developments

  • Global stock averages were mixed last week, with US averages posting significant losses, led lower by growth/ tech stocks, with the Nasdaq a significant underperformer.
  • Whist European and UK stock indices posted only modest losses/ gains on the week, partially assisted by weakening currencies.
  • US and global bonds sold off even further to lower yields led by the US Bond market.
10 year yield
  • The US Dollar has surged across the board, notably within G3, versus the Yen and Euro.
EURUSD chart
  • Gold, Oil and Copper have all stayed within erratic consolidation ranges since March blow-out tops were established, with Gold slightly positive, Oil has a negative bias and Copper with a positive tone.

Key this week

  • Geopolitical focus:
    • Closely watching for potential for Ukraine/ Russia talks to improve and maybe for a ceasefire.
    • Also monitoring for a possible military escalation in Ukraine.
    • Friday 15th April is the Easter Good Friday holiday, with markets closed in the UK, Europe and US.
    • Monday 18th April is the Easter Monday holiday, with markets closed in the UK and Europe, whist the US is open.
  • Central Bank Watch: A busy week for Central Banks as we get the Reserve Bank of New Zealand (RBNZ) and Bank of Canada (BoC) interest rate decisions and statements on Wednesday and the same from the European Central Bank (ECB) on Thursday. We get numerous Fed speakers throughout the week.
  • Macroeconomic data: The standout data releases will be the German and US CPI numbers on Tuesday and UK CPI Wednesday, plus US Retail Sales Thursday.
DateKey Macroeconomic Events
11/04/22China CPI; UK GDP, Manufacturing and Industrial Production
12/04/22UK Employment report; German CPI and ZEW Survey; US CPI
13/04/22RBNZ interest rate decision and statement; UK inflation data (including CPI); US PPI; BoC interest rate decision, statement and press conference
14/04/22Australian Employment report; ECB interest rate decision, statement and press conference; US Retail Sales
15/04/22Good Friday holiday, markets closed in the UK, Europe and US

Editor in chief

Steve Miley is the Market Chartist and has 32 years of financial market experience and as a seasoned expert now has many responsibilities. He is the founder, Director and Primary Analyst at The Mar... Continued

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