No "Rush Hour"
Strong economy, Sticky inflation and high productivity - large fiscal spending- $1.1 trillion in 3 months as interest outgo - this backdrop validates Powell/Waller's "no rush to cut" line sound increasingly prudent. Watch for 4.35 break in 10-year yields for an explosive up move.
ISM mfg index broke above 50 for the first time in sixteen months as manufacturers grow optimistic. New orders & production were up -so too were prices paid to 55.8 from 52.5.
Slowdown in services inflation is now all the more important raising the stakes for tomorrow's ISM services. Today, Bowman, Williams, Mester, and Daly speak. February JOLTS job openings expected at 8.775 mln vs. 8.863 mln in January. Keep an eye on layoffs and hires.
ECB's inflation expectations survey today.
3-year ahead inflation expectations are expected to fall a tick to 2.4% - remained well-anchored around 2.5%. March CPI tomorrow. Cool French & Italian inflation raise the chances of a further dovish pivot from ECB on 11th April - ECB has already pre-committed to a June cut- hence impact of any further dovish language may well be relatively limited. As expected, 1.0695 is set to break.
PMIs came in firmer than expected over the weekend, with mfg at 50.8 vs. 49.1 in Feb, non-mfg at 53.0 vs. 51.4 in Feb and composite 52.7 vs. 50.9 in Feb -the highest composite reading since May 2023. Its US yields that matter much more than another thing - 7.3500 break sooner?
BRC-Nielsen shop price inflation +1.3% y/y in March vs +2.5% y/y in Feb - Shop price growth is the lowest since Dec 2021.
After a long wait, bearish call validated- target 1.2469, 50% of) October/March rise.
Soft Q1 Tankan to keep BOJ cautious, especially as other real sector data have come in soft large all-industry capex came in at 4.0% vs. 9.8% expected and 13.5% in Q4 and was the weakest since Q1 2023.
Yesterday's151.23-77 range stalled closer to March's 34-yr peak at 151.975. Daily close above 152 would target twin Fibos by 155.20.
USDINR is stuck in 83.30.83.45 range. Nevertheless, stay long for 83.77 break.