Observations + Charts
• European stocks and US futures are gently lower in front of tomorrow’s key CPI data followed by CB meetings.
Asian equities mixed Monday. HK stocks lower with tech and property stocks under pressure but rally well off their worst levels.
China stocks rebound as ETF volumes suggest buying by a state fund. The CSI reversed all its 1.6% loss to gain 0.7%.
China deflation fears worsen after consumer prices dropped at the steepest pace in three years, data showed on Saturday. Weak demand an ongoing factor.
Market sentiment took another hit after the Politburo removed the word “forceful” in describing 2024 monetary policy, leading some investors to expect less powerful stimulus ahead.
Japan markets ended sharply higher after RTRS story saying the BOJ may delay exit from easy policy, based on recent weakness in consumption has emerged as a concern for BOJ policymakers.
• European stocks are close to Friday’s closing levels. SXXP volume -28% vs 30-day average.
• HC, financial services, industrial goods, and chemicals are leading. Resources lagging as iron ore price was weighed down by Chinese data.
• European stocks hover near Feb 2022 highs with US CPI, FOMC and ECB looming.
• With 130+bps of ECB cuts priced, there is plenty of room for disappointment from FOMC/ECB meetings.
• DXY is +6bps. Brent is +10bp. US nat gas is -650bp. Bitcoin -348bp while gold -35bp & Silver -90bp.
• US futures are mixed w/ESZ3 +1.50, HIWZ3 +17.00, and NQZ3 -10.50.