Daily Market Outlook, February 27, 2024

Munnelly’s Market Minute…

“US Budget Negotiations In The Spotlight”

Asian Equity Markets: Most markets in the region are higher, with Japan experiencing a smaller-than-expected fall in annual inflation, potentially signaling a rise in interest rates.

UK Economy: The UK's BRC shop price index indicates a monthly fall in food prices in February, supporting hopes of a further decline in inflation.

Bank of England: Bank of England policymaker Ramsden, who voted for no change in interest rates at the last update, is scheduled to speak. However, it's uncertain if he will address UK rates, and MPC members may wait to see the content of the upcoming Budget before commenting further on monetary policy.

Eurozone Economy: Eurozone money supply numbers for January are expected to show modest annual growth, suggesting tight monetary conditions. ECB President Lagarde typically references these figures in her post-policy meeting press conference.

US Economy: US durable goods orders are forecasted to have fallen sharply in January due to the volatile transport sector, notably weak Boeing orders. However, the 'core' number excluding transport is expected to show a third successive rise, indicating a potential leveling off of the downturn in the factory sector. Additionally, a small rise in the Conference Board’s measure of US consumer confidence is anticipated, reflecting improving sentiment about current conditions and the future environment.

US Political Scene: President Biden is scheduled to meet with Congressional leaders to discuss reaching a Budget agreement that increases spending support for Ukraine while avoiding a government shutdown. Time is running out for Congress to pass a bill to avoid a partial shutdown.

Overnight Newswire Updates of Note

Japan's Core Inflation Falls To Lowest Level In 22 Months
Japan Two-Year Yield Rises To Highest Since 2011 On BoJ Bets
Bitcoin Tops $57,000 Price Level For First Time Since Late 2021
Fed’s Schmid Urges Patience On Cuts As Inflation Fight Continues
'Chaotic' US Congress Hurtles Toward New Govt Shutdown Deadline
Joe Biden Says Gaza Ceasefire Could Be Reached By Next Monday
UK Food Inflation Near 2-Year Low, BRC Data Shows
China Wine Tariffs Expected To Be Gone By End Of March
Japan’s FSA To Check Shortfalls In Bank Lending Standards
US Corporate Bond Sales Hit $153 Bln In February Record
Exxon Throws A Wrench In Chevron’s $53 Bln Deal For Hess
Disney’s Sean Bailey, Longtime Movie Executive, Steps Down

(Sourced from Bloomberg, Reuters and other reliable financial news outlets)

FX Options Expiries For 10am New York Cut

(1BLN+ represent larger expiries, more magnetic when trading within daily ATR)

EUR/USD: 1.0750 (EU1.22b), 1.0800 (EU1.14b), 1.0650 (EU1.06b)
USD/JPY: 150.00 ($1.2b), 150.20 ($955.5m), 151.00 ($832.1m)
AUD/USD: 0.6600 (AUD2.12b), 0.6700 (AUD1.73b), 0.6710 (AUD938.9m)
USD/CNY: 7.2000 ($499.2m), 7.5325 ($391.6m)f 6.4375 ($370m)
USD/CAD: 1.3550 ($500m)
USD/BRL: 7.8000 ($660.4m), 6.4000 ($340.1m), 5.0500 ($306.3m)
GBP/USD: 1.2650 (GBP1.01b), 1.2800 (GBP400m)
USD/MXN: 17.34 ($420.3m), 23.75 ($414.2m)

CFTC Data As Of 20/02/24

Japanese Yen net short position is -120,778 contracts.
British Pound net long position is 46,312 contracts.
Euro net long position is 68,016 contracts
bitcoin net short position is -2,098 contracts.
Swiss Franc posts net short position of -9,923 contracts.
Equity Fund managers raise S&P 500 CME net long position by 17.027 contracts to 947,280.
Equity fund speculators increase S&P 500 CME net short position by 35.358 contracts to 419,832.