Housekeeping: Good Morning
Bretton Woods Three is a Process, Not an Event
Today:
Yesterday’s Activity:
US equities retreated on Thursday amid a surge in oil prices and ahead of the March jobs report.
SPX -1.23% at 5,147, NDX -1.55% at 17,878, DJIA -1.35% at 38,596, RUT -1.08% at 2,053.
Market Commentary:
Fed
Powell has made it clear he has no interest in lowering rates until inflation is at 2% or unless there is a significant uptick in unemployment.
Yesterday, Kashkari inferred they may not cut rates at all unless inflation stops trending sideways and resumes its decline to 2%
inflation has stabilized to upticked in the past month or so
NFP reports are increasingly unreliable due to (now openly!) publicly admitting cooked numbers from immigration labor
Payrolls: CONSENSUS— 214k jobs added ranging from 150k to 250k
Yesterday
The Fed’s Neel Kashkari announced at approximately 2:08pm the Fed would be very reluctant to ease at all this year if inflation did not get to their level quickly.
“If we continue to see inflation moving sideways, then that would make me question whether we needed to do those rate cuts at all”.
***
In Washington: Biden‘s conversation with Netanyahu yielded poor results hinting at escalation.
In the Middle East: There has been more open talk about direct involvement all day with Iran versus Israel, especially in light of the recent escalating actions by Israel. ZH notes:
there are “reports of potential attacks within Iran and also potential retaliation toward Israel following Monday's airstrikes.”
While no obvious disruption would occur due to military strike, producers would nevertheless shut down to minimize problems should military escalation occur in the region.
***
In Europe right around the 2 to 3pm time frame, Secretary of State Blinken, stated the Ukraine would become a member of NATO as soon as July maybe.
“Ukraine will become a member of NATO. Our purpose at the summit is to help build a bridge to that membership."
This surely has energy implications.
Full analysis and slides in Premium
Price Action
Gold- capped if no geopolitical action
Silver- price spike has gotten their attention
Miners- in the green
Oil- bigger problem now
BTC/ETH- mixed up
Stocks- finally getting the message maybe
Bonds- YCC is coming
Dollar- not performing as your expect
Market News:
"Drone attacks in Russia, unrest in the Middle East and strong consumer demand have propelled oil prices to their highest level in months, setting the stage for what could be a summer surge in gas prices. Source: WSJ
"Federal Reserve Bank of Minneapolis President Neel Kashkari said interest-rate cuts may not be needed this year if progress on inflation stalls, especially if the economy remains robust." Source: Bloomberg
"European house prices fell for the first time in a decade last year, as strong growth in the property markets of some eastern and southern countries was masked by declines in many northern EU states. Source: FT
GEOPOLITICS
CIA reportedly warned Israel that Iran will attack the country in the next 48 hours
Israel raised the alert level at embassies worldwide to maximum and is evacuating missions in several countries
Israeli PM Netanyahu said Iran has been working against Israel for years and therefore, Israel is operating against Iran and its proxies.
Israel told the US that if Iran launched an attack from its soil against Israel in retaliation for the killing of an Iranian General earlier this week,
White House said US President Biden emphasised to Israeli PM Netanyahu that the strikes on humanitarian workers and the overall humanitarian situation are unacceptable
US President Biden’s administration recently authorised the transfer of over 1k 500-pound bombs and over 1k small-diameter bombs to Israel,
US Secretary of State Blinken reaffirmed at the Foreign Ministers meeting of the NATO-Ukraine Council that Ukraine's future is in NATO.
Japan's METI announced Japan will expand the export ban to Russia to include more industrial items such as lithium-ion batteries, thermostats and grinders effective April 17th.
Russian Foreign Ministry said Sweden's plans to set up a NATO base on Gotland Island are provocative, according to RIA.
Some headlines via NewSquawk or DataTrek
Data on Deck:
MONDAY, APRIL 19:45 am S&P U.S. manufacturing PMITUESDAY, APRIL 210:00 am Factory orders Feb, speakersWEDNESDAY, APRIL 310:00 am ISM services March 52.6% 52.6% 12:00 pm, speakersTHURSDAY, APRIL 48:30 am Initial jobless claims March , speakersFRIDAY, APRIL 5 8:30 am U.S. nonfarm payrolls am U.S. unemployment rate 1
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