- BOE's Bailey: We are not seeing any concerning signs in markets due to QT
- WTI crude oil futures settle at $83.26
- ECB's Villeroy: Still have a little way to go with rate hikes
- Bank of America credit card data is a warning about the consumer
- Fed minutes: Participants noted they considered keeping rates unchanged
- U.S. Treasury auctions off $32 billion of 10 year notes at a high yield of 3.455%
- Major European indices close higher on the day
- More from Feds Daly: There is a sense we will get rates up to a level and stay
- Feds Daly: Fed has more work to do on rate hikes
- Goldman Sachs sees Fed terminal rate at 5.0% – 5.25% now
- Macklem Q&A: The outlook for growth has not changed very much
- Bitcoin consolidates above and below 30K. Traders looking for the next shove.
- Macklem opening statement: Governing Council discussed whether it had raised rates enough
- Fed's Barkin: I definitely see demand cooling
- EIA weekly crude oil inventories +597K vs -583K expected
- ECB Holzman: Inflation outlook argues for another 50 basis point hike in May
- The full statement from the Bank of Canada April rate decision
- Bank of Canada holds rates at 4.50%, as expected
- BOE's Bailey: We don't know yet where c-bank balance sheet reduction will need to stop
- Warren Buffett: Bitcoin is a gambling token and doesn't have any intrinsic value
- US March CPI 5.0% y/y vs 5.2% expected
- ECB's De Guindos: Recent core inflation data in the eurozone is sticky
- The AUD is the strongest and the GBP is the weakest as the NA session begins
- ForexLive European FX news wrap: A snoozer ahead of the US CPI data release
- US MBA mortgage applications w.e. 7 April +5.3% vs -4.1% prior
The US headline CPI fell to 5% from 6% last month but the core inflation moved higher to 5.6% from 5.5% last. The shelter component declined from last month, but still came in at 0.6% (vs 0.8% last month). Shelter accounts for 34.7% of CPI inflation. Many economist/analysts have been calling for it's decline, but so far 0.6% MoM may be lower than 0.8% last month, but it is still a high number and at nearly 35% of the CPI, still a major contributor to the rate being well above the 2% target level.
The Fed's Barkin commented that he is still waiting for inflation to come down despite the sharp fall...which is true. The headline and core inflation is STILLL at 5% and 5.6% respectively. Barkin said that inflation would need to reach 2% target for a few months to make sure inflation is killed. Fed's Daly was also unimpressed by the higher inflation saying the Fed has more work to do on rate hikes.
Meanwhile the Fed minutes showed that Fed staff forecast a mild recession by the end of the year. They also said that inflation will "step down markedly" this year, and slow "sharply" next year. At the same time they commented that economic risks are to the downside but inflation risks are still to the upside.
The room is spinning from all the projections and comments, but the Fed officials seem to indicate that they are sticking to their guns on rates (with rates staying high into 2024). They will continue to fight inflation - or say they will fight the fight - even with some indications that it is moving lower despite the higher shelter costs.
The market is taking a different track as rates moved lower today with:
- 2 year at 3.968%, -9.0 basis points
- 5 year yield 3.467, -8.2 basis points.
- 10 year yield 3.401%, -3.2 basis points (this despite an unimpressive 10 year note auction with a 2.0 basis point tail)
The longer 30 year yield did move marginally higher.
- 30 year yield 3.633% +1.2 basis points
The market sees the terminal rate at 5.01% in June with the Fed target rate falling to 4.36% by January 2024
In other markets.
- Spot gold is trading up $11.06 or 0.59% at $2014.68.
- Spot silver is up $0.42 or 1.71% at $25.49
- WTI crude oil is trading at the highest levels this year at $83.27
- Bitcoin is dipping back below the 30,000 level as we head toward the end of the day at $29,914
US stocks with the NASDAQ index doing the worst:
- Dow industrial average fell -38.29 points are -0.11% at 33646.51
- S&P index fell -16.99 points or -0.41% at 4091.96
- NASDAQ index fell minus 102.55.2 -0.85% at 11929.33
- Russell 2000 fell -12.89 points or -0.72% at 1773.69
In the forex market, the CHF is the strongest of the majors while the USD is the weakest. The CAD was also weaker today after the Bank of Canada kept rates unchanged for the 2nd consecutive day.
