RANSquawk

Stocks Rebound In Calm Trading On Back Of Stronger Crude, Dollar

Unlike yesterday's overnight session, which saw some subtantial carry FX volatility and tumbling European yields in the aftermath of the TSY's anti-inversion decree, leading to a return of fears that the next leg down in markets is upon us, the overnight session has been far calmer, assisted in no small part by the latest China Caixin Services PMI, which rose from 51.2 to 52.2. Adding to the overnight rebound was crude, which saw a big bounce following yesterday's API inventory data, according to which crude had its biggest inventory draw in 2016, resulting in WTI rising as high as $37.15 overnight

"Risk Off" - Global Stocks Slide As Yen Surges To 17 Month High; Bund Yields Plunge

The market's slumberous levitation of the past month, in which yesterday's -0.3% drop was the second largest in 4 weeks and in which the market had gone for 15 consecutive days without a 1% S&P 500 move (in March 2015 the sasme streak ended at day 16) may be about to end, after an overnight session, the polar opposite of yesterday's smooth sailing, which has seen a sudden return of global risk off mood.

Global Stocks Rise, Europe Rebounds As Oil Halts Decline

In a quiet start to the week following last week's surprisingly strong rebound which followed a stronger than expected jobs report (perhaps to demonstrate that good news is once again good news), Japan stocks continued to sink as the USDJPY dropped to fresh lows, while commodities declined for a fifth day as the supply glut from crude to copper weighed on prices, dragging down commodity currencies. European equities rose, rebounding from a one-month low.

Japan Stocks Plunge; Europe, U.S. Futures, Oil Lower Ahead Of Payrolls

For Japan, the post "Shanghai Summit" world is turning ugly, fast, because as a result of the sliding dollar, a key demand of China which has been delighted by the recent dovish words and actions of Janet Yellen, both Japan's and Europe's stock markets have been sacrificed at the whims of their suddenly soaring currencies. Which is why when Japanese stocks tumbled the most in 7 weeks, sinking 3.5%, to a one month low of 16,164 (after the Yen continued strengthening and the Tankan confidence index plunged to a 3 year low) it was anything but an April fool's joke to both local traders.

On Final Day Of Extremely Volatile Quarter, Futures Trade Modestly Lower

On the last day of an extremely volatile first quarter, following the latest torrid push higher in risk assets over the past two days following Yellen's dovish Tuesday comments, today has seen a modest pull back in risk, whether because the market is massively overbought, because someone finally looked at what record multiple expansion that has taken place in Q1 as earnings are set to collapse by nearly 10%, or simply due to fears that tomorrow's payrolls number will show an abnormal amount of minimum wage waiters and bartenders added.

Futures, Oil Dip On Stronger Dollar Ahead Of "Hawkish" Yellen Speech

With Europe back from Easter break, we are seeing a modest continuation of the dollar strength witnessed every day last week, which in turn is pressuring oil and the commodity complex, and leading to some selling in US equity futures (down 0.2% to 2024) ahead of today's main event which is Janet Yellen's speech as the Economic Club of New York at 12:20pm, an event which judging by risk assets so far is expected to be far more hawkish than dovish: after all the S&P 500 is north of 2,000 for now.

RANsquawk Week Ahead - 28th March 2016

 

  • The US sees the release of the monthly nonfarm payrolls report this week after last month’s stellar job numbers but downbeat average hourly earnings
  • After a long weekend, European data is relatively light with highlights including CPI readings from Germany and the Eurozone, as well as German unemployment