Commodities | Equities | FX | Global | Rates
We standardise price changes across different markets to allow for cross-market comparisons.
Market Moves
Last week saw a renewed move higher in crude oil as American equities continued to breakdown through the start of 2022’s first earning season. Meanwhile, USD/JPY pushed through 128.0.
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We standardise price changes across different markets to allow for cross-market comparisons.
Market Moves
Last week saw a renewed move higher in crude oil as American equities continued to breakdown through the start of 2022’s first earning season. Meanwhile, USD/JPY pushed through 128.0.
Brent Crude (+1.6 standard-deviations) saw the largest vol-adjusted positive move of the week as underlying dynamics returned to favour a supply shortage, Libya this time seeing it’s largest two oil feeds shut. We continue to be bullish on oil. It followed the IEA members broke down their previously agreed planned output increase. Other commodities have had a mixed week, Gold saw a +0.9 standard-deviation move while NatGas (UK) fell by 1.1 standard-deviations.
10-year Bunds (+1.4 standard-deviations) led a poor week for German, US, and UK 10-year rates. The move higher has continued as European markets reopened a day later than US markets. In particular, the US 10-year hit 2.88%, the highest since 2018, as St. Louis Fed President Jim Bullard failed to rule out a 75 basis point hike. In contrast, the China 2-year saw the second largest move, when adjusted for volatility, over the past week – yields were down 1.8 standard-deviations.
Meanwhile in FX, JPY (-2.2 standard-deviations) saw the largest vol-adjusted move of the week as US-Japan spreads continued to widen. We believe it would be hard to chase USD/JPY higher at these levels.
Microsoft (-1.8 standard-deviations) lead a poor week for week equities, their earnings are due 26 April – read John’s earnings preview. Meanwhile, JP Morgan Chase & Co – who have already missed earnings expectations – fell 1.6 standard-deviations in the past week. And on indices, our preference for S&P500 weakness performed well last week as the index moved -1.1 standard-deviations.
Australia 2-year swaps (-1.1 standard-deviations) fell as the RBA appeared less hawkish than markets. RBA minutes revealed they want to wait for more evidence – Q1 CPI comes 26 April. Although, New Zealand Q1 CPI will be a guide for markets which will come 20 April.
Turning to this week, we think Fed speakers are likely to continue to support 50bp in May but remain equivocal for the remainder of the year. Furthermore, IMF Spring meetings will highlight differences between countries’ handling of inflation. On the data side, a light week will highlight S&P and Philly Fed PMIs – Dominique sees S&P PMIs moving sideways.
Bilal Hafeez is the CEO and Editor of Macro Hive. He spent over twenty years doing research at big banks – JPMorgan, Deutsche Bank, and Nomura, where he had various “Global Head” roles and did FX, rates and cross-markets research.