The FP Markets research team produce First Light News during the early hours of the European session, ensuring traders and investors have the news needed to begin their day.

Good morning.

Major US equity indices were largely positive on Thursday, bolstered by continued strength out of the tech sector (+1.2%). The Dow added 141 points (+0.4%) to touch 32,859, the S&P 500 gained 23 points (+0.6%) to test 4,050, the Nasdaq 100 also ended higher, up 117 points (+0.9%) to 12,963, while the Russell 2000 dipped 3.2 points (-0.2%) to touch 1,768. Of note, the Nasdaq 100 refreshed year-to-date tops at 12,987. FAANG stocks were also mostly positive on the session: Meta Platforms (META), Amazon (AMZN), Apple (APPL), and Netflix (NFLX) gained 1.2%, 1.8%, 1.0% and 1.9%, respectively (note that Moody’s raised the credit rating to an investment grade of ‘Baa3’ for Netflix); Alphabet (GOOGL), however, underperformed, dropping 0.6%.

It was another mixed day for US government Treasury yields. Shorter-dated rates continued to climb; the 2-year US Treasury yield gained two basis points and registered a fourth consecutive day in the green. However, upside momentum has noticeably faded in the last few days. The benchmark 10-year US Treasury yield dropped again on Thursday, easing nearly two basis points though it remains above its 200-day simple moving average.

Economic data on Thursday witnessed headline inflation (CPI) out of Germany ease to 7.4% in the twelve months to March, according to the Federal Statistical Office (Destatis), following the 8.7% print in January and February. Month-over-month data saw consumer prices increase by 0.8%, matching February’s reading. In the US, economic activity increased 2.6% (Final) on an annual basis in Q4 of 2022 (vs 2.7% expected), according to the Bureau of Economic Analysis. We also saw weekly jobless filings in the US tick slightly higher than expected for the week ending 25 March, recording 199,000 claims. The previous release of 191,000 remains unrevised, and we have not been above the 200,000 mark since early March. Finally, US continued jobless claims reached 1.689 million (vs 1.697 million).

Markets Today

Asia Pac indices finished in the green across the board. Japan’s Nikkei 225 rallied nearly 1.0%, touching a high of 28,124. We also had the Tokyo core CPI release, which came in slightly above the consensus estimate of 3.1% at 3.2%. Australia’s ASX 200 and South Korea’s KOSPI outperformed, adding 1.0% and 0.8%, respectively. Note that the ASX 200 rallied five out of five days this week, ending the week higher by 3.2%, its largest one-week gain since November last year. China’s Shanghai Composite ended 0.4% higher, underpinned by better-than-expected manufacturing and services data.

Taking its lead from Asian markets, European equity indexes open this morning positive, with a similar picture seen in US equity index futures. The FX space is also largely green this morning; the Japanese yen, nonetheless, is a notable laggard at the time of writing, while the EUR/USD has just turned flat. Also relevant, we can see that sterling is fast approaching YTD peaks of $1.2448 against its US counterpart. For commodities, spot gold (XAU/USD) and spot silver (XAG/USD) are subdued and not really offering anything. Nevertheless, both metals concluded Thursday on the front foot, adding 0.8% and 2.4%, respectively. WTI oil is marginally higher in early European hours (+0.3%), following Thursday’s 2.1% upside push.

Headline Events for the Day Ahead:

Annual Inflation Rate for the Euro Area for March at 10:00 am GMT+1 (Expected: 7.1%; Previous: 8.5%).

US Month-Over-Month Core PCE Price Index for February at 1:30 pm GMT+1 (Expected: 0.3%; Previous: 0.6%).

US Year-Over-Year Core PCE Price Index for February at 1:30 pm GMT+1 (Expected: 4.7%; Previous: 4.7%).

Chart of the Day

The daily price of ETH/USD is seen carving out a bullish flag pattern between $1,715 and $1,859 at a resistance from $1,789.

(Chart: TradingView)

Major Currency Markets as of around 8:50 am GMT+1:

(Trading View)

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