The EIA’s report showed the four-week moving average of gasoline supplied, a proxy for demand, rising to the highest level since November 2021. That strong consumer demand trend is one of the reasons why WTI oil hasn’t dropped to new 2023 lows in recent weeks said Richey. Click here to read the full article.
If the current Fed is listening to Bernanke (and I imagine they are), then the Fed may be more focused on unemployment than anyone appreciates, that’s why there is 50 more basis points of hiking in store, probably regardless if CPI declines further, says Essaye. Click here to read the full article.
What’s in Today’s Report:
Stock futures are falling with global markets and yields are rising this morning after more hawkish central bank decisions overnight as focus turns to the BOE.
In Europe, monetary policy decisions were net hawkish as Norway’s central bank raised rates 50 bp vs. (E) 25 bp to 3.75% while the Swiss National Bank met estimates with a 25 bp hike to 1.75%. The rate hikes are pressuring global bond markets (yields higher) and weighing on sentiment, dragging equity markets lower.
Looking into today’s session, early focus will be on the Bank of England as a 25 bp hike to 4.75% in the benchmark policy rate is expected but there is risk of a 50 bp hike to 5.00% which would be another hawkish surprise for markets and likely result in rising yields and more pressure on overbought equity markets.
In the U.S. there are two economic reports to watch: Jobless Claims (E: 261K) and Existing Home Sales (E: 4.250M). A further rise in claims could bring into question whether or not the labor market is suddenly beginning to deteriorate meaningfully while strong housing data would warrant a hawkish reaction after the much better than expected Housing Starts print earlier this week.
From there, focus will turn to the Fed as Chair Powell continues his semi-annual Congressional testimony at 10:00 a.m. ET while Mester will speak around the same time (10:00 a.m. ET).
Finally, there is a 5-Yr TIPS auction at 1:00 p.m. ET that could offer insight to inflation expectations and move yields, but most of the market-moving news will likely hit before the lunch hour today.
Tyler Richey, co-editor at Sevens Report Research, pointed out that the EIA showed that the four-week moving average of gasoline supplied, a proxy for consumer fuel demand, rose to a new 18-month high of 9.24 million barrels a day. That suggests that the trend in gasoline demand is “one that is increasing, and that is a good thing for the time being,” he said. Click here to read the full article.
Prices had started the week moving higher after Saudi Arabia said it would cut output by an additional 1 million barrels per day in July. However, “traders faded the move,” as the Saudi cut would only remove one-third of a single day’s worth of global oil production over the course of July, said Tyler Richey, co-editor at Sevens Report Research. Click here to read the full article.
What’s in Today’s Report:
Futures are slightly higher on momentum from last week’s rally, as it was a very quiet weekend of actual news and investors are looking ahead to multiple important market catalysts this week.
Economically, the only notable number was Japanese PPI which rose 5.1% y/y vs. (E) 5.7% y/y in what is the latest sign of global disinflation.
Oil declined more than 2% overnight on over supply concerns as Russia is largely ignoring its production quota.
Today there are no notable economic reports nor any Fed speakers, so barring any major surprises markets should be relatively calm ahead of tomorrow’s CPI report, Wednesday’s FOMC decision and Thursday’s important economic data.
What’s in Today’s Report:
Futures are slightly lower as markets digest Thursday’s rally following a very quiet night of news.
Economically, the only notable report overnight was Chinese PPI, which feel –4.6% vs. (E) -4.2% and provided the latest sign that global disinflation is potentially accelerating.
Politically, former President Trump was federally indicted for illegally retaining classified documents, although that shouldn’t impact markets.
Today there are no economic reports and no Fed speakers, so near term technicals should drive trading with all eyes focused in whether the S&P 500 can break above 4,300 for the first time in over a year.
The natural-gas market is reaching a historically pivotal phase of the year, with the price swings typically occurring in the summer and winter months, said Tyler Richey, co-editor at Sevens Report Research. Click here to read the full article.
The U.S. dollar, which rallied to a two-month high last week, is demonstrating a bullish signal from a technical perspective and has the potential to trend up in the coming months. The greenback’s strength will weigh on equities, starting by the beginning of June, noted Tom Essaye, founder of Sevens Report Research. Click here to read the full article.
As such, the pain trade has been higher for all of 2023 and that’s helping support stocks despite decidedly mixed fundamentals (and mixed is being generous),” Tom Essaye, founder of Sevens Report Research wrote. Click here to read the full article.
