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MORNING MISSIVE | WEDNESDAY

MORNING,

WITH ALL EYES ON TODAY’S FED RATES DECISION, STOCKS RALLIED TO FRESH ALL-TIME HIGHS AMID GAINS IN A HANDFUL OF BIG TECHS, BONDS RALLIED INTO THE SESSION.

US TREASURIES ADDED TO THE DAY’S RALLY OVER THE US AFTERNOON SESSION, BOOSTED BY A STRONG 20Y BOND RAFFLE WHICH TRADED 2BPS THROUGH THE WI YIELD. TREASURIES WERE UNDERPINNED EARLY IN THE SESSION BY WIDER GAINS IN GILTS AFTER A SOLID 20Y UK AUCTION, BOJ MOVEMENTS AND CANADIAN INFLATION SURPRISES ALSO CONTRIBUTED. COMING INTO CLOSE OF SESSION YIELDS WERE CLOSE TO LOWS OF THE DAY.

ECONOSTREAM NEWS: ECB INSIDERS SEE DATA DECIDING FREQUENCY OF FURTHER MOVES AFTER FIRST 25BP CUT IN JUNE; EXPECT STEPS OF 25BP; ‘EVERYBODY’S TALKING ABOUT 25’; NO TALK AT ALL OF 50; MAKES NO SENSE TO WAIT FOR THE US FEDERAL RESERVE BEFORE ECB CUTS.

TIGHTENING OIL SUPPLIES CONTINUES TO PUSH WTI HIGHER,NOW ABOVE $83 A BARREL, EXTENDING THE CURRENT RALLY. UKRAINIAN DRONE ATTACKS ON RUSSIAN OIL REFINERIES HAVE ADDED PRESSURE, DRIVING UP CRUDE DEMAND. APPROX 900K BARRELS OF RUSSIAN REFINERY CAPACITY IS OFFLINE.

DONALD TRUMP: THE US WILL “100 PERCENT” REMAIN IN NATO UNDER HIS LEADERSHIP SO LONG AS EUROPEAN COUNTRIES “PLAY FAIR.”

BITCOIN CONTINUED ITS RETREAT. AS INVESTORS MULLED A RECORD DAILY OUTFLOW FROM THE WORLD’S BIGGEST ETF FOR THE COIN. THE $25 BILLION GRAYSCALE BITCOIN TRUST, POSTED A $643 MILLION OUTFLOW ON MONDAY, THE MOST SINCE IT CONVERTED INTO AN ETF IN JAN.

UK CPI PREVIEW: UK PRICE METRICS FOR FEB WILL BE EYED, WITH THE MARKET EXPECTING A GENERAL DECLINE IN ALL THE Y/Y MEASURES AS FOOD, CORE GOODS, AND SERVICES PRICES ARE LIKELY TO BE THE MAIN DOWNWARD DRIVER OF THE HEADLINE FIGURE. FEBRUARY DATA COULD TILT BANK OF ENGLAND TOWARDS INTEREST-RATE CUTS IN SUMMER. THE DETAILS OF THE UK CPI REPORT, INCLUDING FOOD PRICES AND THE STICKY SERVICES INFLATION, WILL GRAB MARKETS’ ATTENTION IN THE RUN-UP TO THE BOE POLICY ANNOUNCEMENTS.

TURNING TO NY HOURS, THE MAIN HIGHLIGHT WILL BE THE US FOMC RATE DECISION FOR MARCH, WITH PARTICIPANTS ON THE LOOKOUT FOR THE UPDATED DOT PLOT FROM THE MEETING, AND FED CHAIR POWELL’S GUIDANCE IN HIS POST-MEETING PRESSER. PARTICIPANTS ARE WIDELY EXPECTING THE FED TO HOLD RATES STEADY AT 5.25%-5.50%, IN LINE WITH RECENT FEDSPEAK RE: BEING PATIENT ON MONETARY POLICY. NICK TIMIRAOS (WSJ): AT THIS WEEK’S MEETING, THE DEBATE IS LIKELY TO CENTRE ON WHAT IT WOULD TAKE TO COMMENCE RATE CUTS BY MID-YEAR. INSIDE THE CENTRAL BANK, ONE CAMP SEES NO NEED TO CUT SINCE THE ECONOMY IS STRONG AND WANTS MORE EVIDENCE OF A SLOWDOWN. ANOTHER CAMP IS MORE ATTENTIVE TO SIGNS OF WEAKER DEMAND AND HIRING.  DOLLAR QUIET AHEAD OF FOMC MONETARY POLICY DECISION; DOT PLOT AND FED CHAIR POWELL’S GUIDANCE EYED.

OVERNIGHT MOVES

FOCUS EVENTS

EU SESSION:

07:00 – UK: PPI, CPI, CPI CORE, RPI, RETAIL PRICE INDEX;

08:45 – ECB LAGARDE (NO KNOWN BIAS);

09:00 – ITA: INDUSTRIAL PRODUCTION;

09:30 – ECB LANE (SUPER DOVE);

10:00 – EUR: CONSTRUCTION OUTPUT;

12:00 – ECB HERNANDEZ DE COS (SUPER DOVE);

13:45 – ECB SCHNABEL (HAWK);

15:00 – EUR: CONSUMER CONFIDENCE INDEX;

15:45 – ECB HOLZMANN (NV, SUPER HAWK);

16:30 – ECB NAGEL (SUPER HAWK)/ VILLEROY (NO KNOWN BIAS);

US SESSION:

11:00 – US: MBA MORTGAGE APPLICATIONS;

17:30 – CAN: BANK OF CANADA RELEASE SUMMARY OF DELIBERATIONS;

18:00 – US: FOMC RATE DECISION;

18:30 – FED POWELL (NO KNOWN BIAS) POST FOMC PRESSER;

BOND SUPPLY EVENTS:

10:30 – GER: 20Y BUND €1.00BN (EQUIV RX 15K)

10:30 – GER: 28Y BUND €1.00BN (EQUIV RX 13K)

https://www.livesquawk.com/report/special_powell-set-to-keep-forward-guidance-to-a-minimum

Livesquawk

Livesquawk

www.livesquawk.com

https://www.livesquawk.com/report/special_swiss-central-bank-preps-rate-cutbut-timing-unclear

Livesquawk

Livesquawk

www.livesquawk.com

https://www.telegraph.co.uk/business/2024/03/19/future-triple-lock-public-sector-spending-cuts-hunt/

Future of triple lock depends on public sector spending cuts, says Hunt

Tories’ pension pledge ‘under review’ amid severe pressure on state finances

www.telegraph.co.uk

https://www.thetimes.co.uk/article/fund-managers-at-most-bullish-in-two-years-about-global-growth-dznkcktgc

Fund managers at their most bullish for years over global growth

Bank of America survey finds that fears of recession are fading

www.thetimes.co.uk

https://www.thetimes.co.uk/article/nvidia-up-as-it-hints-blackwell-super-chip-will-be-out-this-year-3cqhdzqsx

Nvidia up as it hints Blackwell super-chip will be out this year

After a slow start, investors revised their opinion of Nvidia’s newest artificial intelligence processor and pushed the stock higher after the chipmaker said it is expected to begin deliveries this

www.thetimes.co.uk

https://www.ft.com/content/418907d1-d497-439c-9800-eb814226ab71

Bill Gates’ TerraPower plans to build first US next-generation nuclear plant

Company applies to start constructing sodium-cooled reactor near coal plant in Wyoming in June

www.ft.com

https://www.theguardian.com/world/2024/mar/19/bank-of-japan-raises-interest-rates-negative-scrapped-borrowing-costs

Japan raises interest rates for first time since 2007

Shift makes Bank of Japan the last central bank to end negative rates in move that has ‘a lot of symbolic significance’ according to analysts

www.theguardian.com

https://www.swissinfo.ch/eng/ecb%27s-kazaks-%27comfortable%27-with-market-bets-on-three-rate-cuts-this-year/73913494

ECB’s Kazaks ‘comfortable’ with market bets on three rate cuts this year – SWI swissinfo.ch

By Francesco Canepa and John O’Donnell FRANKFURT (Reuters) – European Central Bank policymaker Martins Kazaks said on Tuesday he was “comfortable” with investor bets on three interest rate cuts by the central bank by the end of the year. Many ECB policymakers have expressed support for a first reduction in borrowing costs from their current…

www.swissinfo.ch
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