MARKET WRAPS
Watch For:
U.K. monthly retail sales figures; Germany Ifo Business Climate Index; trading updates from X5 Retail Group, Phoenix Group Holdings, OMV
Opening Call:
European stock futures were lower early Friday after the previous day's record highs and on a broadly negative lead from Asian stock markets; the dollar advanced; Treasury yields edged lower; oil and gold futures declined.
Equities:
European stock futures were tracking lower after hitting record highs on Thursday, boosted by investors' growing conviction that the post-Covid surge in borrowing costs is coming to an end soon.
The Swiss National Bank's rate decrease as well as comments from central bank officials in the U.S. and Europe have indicated that rates are set to decline across the developed world despite signs that inflation is stickier than expected.
"The outcome makes us more confident in our expectation for the first cut to come in June," said Carl Riccadonna, chief U.S. economist at French bank BNP Paribas.
However, Phil Orlando, chief equity strategist at Federated Hermes, said he believes that this year's rally has been too sharp and that he expects stocks to fall once the Fed does lower rates and slump until after the U.S. presidential election-when they should rally anew.
"While things look all hunky-dory now, I think there's a risk of a soft patch coming over the summer and fall," he said.
Forex:
The U.S. dollar gained on strong U.S. economic data released overnight that dim the prospects of Fed rate cuts.
The strong U.S. PMI data have sparked a partial rebound in USD, Westpac Strategy Group said.
However, a lack of data to end this week and markets' continued attention on inflation will likely put focus on next week's U.S. data, particularly PCE, it added.
Bonds:
Treasury yields were lower early Friday. They finished little changed on Thursday, though the policy-sensitive two-year rate advanced as data showed U.S. business activity continues to rise.
Fed-funds futures traders now see a 63.5% chance of a 25-basis-point rate cut by June, down slightly from 67.4% a day ago, according to the CME FedWatch Tool.
Treasury's $16 billion auction of 10-year Treasury Inflation-Protected Securities on Thursday was met with weak results, according to BMO Capital Markets strategist Vail Hartman.
Energy:
Oil futures continued to track lower, pressured in part by concerns over the outlook for energy demand.
Oil's decline is also currency-driven, with dollar-denominated prices of the commodity down as the greenback strengthened, said Colin Cieszynski, portfolio manager and chief market strategist at SIA Wealth Management.
There was also news that the U.S. is poised to bring a draft U.N. resolution calling for an immediate and sustained cease-fire in Gaza to a vote in the Security Council on Friday, which would dispel supply-disruption concerns, analysts said.
Metals:
Gold declined in Asia but may remain supported by ongoing prospects of Fed rate cuts this year which boost the appeal of the non-interest-bearing precious metal.
These expectations are maintaining a positive outlook for gold, says Daniel Takieddine, CEO MENA at BDSwiss.
Also, central bank demand for gold could continue to support it, says Takieddine, noting central banks have sustained successive months of net purchases and may continue to drive demand for gold in the medium term.
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Zinc edged lower in likely position adjustments after gaining overnight on news that a mine operated by Glencore in Australia would temporarily cease operations due to a cyclone.
Base metals across the board are likely to trade in a narrow range as the Fed's monetary policy statement seems to have had little effect on the market, Daria Efanova, head of research at Sucden Financial said.
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Iron ore extended recent gains, as investors believe the weak sentiment toward the steelmaking raw material has run its course, with risk-on appetite setting in, ANZ said.
Prices will unlikely fall much below current levels amid Chinese support measures for the renewable energy sector and the electric-vehicle market, coupled with the low growth in supply of iron ore, it added.
TODAY'S TOP HEADLINES
Immigration Is Helping the U.S. Edge Out Asia
As the world's postpandemic economic order takes shape, the U.S. has emerged as an unexpected winner. Asian economies that fared relatively well during the pandemic-especially China, but also advanced economies such as Japan and Taiwan-have struggled to maintain steam.
The end of the pandemic-era export boom and Washington's aggressive stimulus are two reasons. But the U.S. has another ace up its sleeve: big postpandemic immigration inflows.
U.K. Consumers Prove Cautious Amid Economic Clouds, Survey Suggests
Consumer confidence remains weak in the U.K. amid continued concerns over the economy, according to a survey published Friday.
Research group GfK's consumer confidence barometer was unchanged in March at minus 21, thwarting economists' hopes of a slight uptick, as set out in a poll conducted by The Wall Street Journal.
China's Xi Jinping to Meet U.S. CEOs in Beijing Next Week
Chinese leader Xi Jinping plans to meet a group of U.S. business leaders next week after a government-sponsored forum as Beijing steps up efforts to woo American firms amid an exodus of foreign capital.
The meeting with China's top leader is set for Wednesday, and insurer Chubb's CEO, Evan Greenberg, along with Stephen Orlins, president of the National Committee on U.S.-China Relations, and Craig Allen, president of the U.S.-China Business Council, are expected to attend, people familiar with the matter said. The list of participants is still being completed and the people said that Beijing could cancel the Xi meeting at the last minute.
One CEO's Radical Fix for Corporate Troubles: Purge the Bosses
Ever since Henry Ford roamed factory floors to improve industrial efficiency a century ago, CEOs have concocted their own schemes to remake the modern company.
Bayer Chief Executive Bill Anderson is next in line. His idea: Fewer bosses, fewer rules.
IAG Warns Air Europa's Consumers of Personal Data Leak
International Consolidated Airlines Group said personal data of Air Europa consumers has been compromised as a result of a security incident discovered in October.
The parent company of British Airways and Iberia on Thursday said in an email sent to Air Europa's consumer base that the data breach exposed names, birthdays, nationalities, ID cards or passport information and phone numbers of customers.
Robots Are Entering the Ukraine Battlefield
DRUZHKIVKA, Ukraine-In August, a Ukrainian assault team steered an armored vehicle silently for 2.5 miles before firing 300 bullets at a group of startled Russian soldiers.
Monopoly Case Pits Justice Department Against Apple's Antitrust Winning Streak
Apple has faced complaints for years about the tight control it maintains around its popular devices-exactly what the Justice Department is challenging in its landmark lawsuit.
So far, the courts have mostly sided with the iPhone maker over critics of its fees and scrutiny of how apps and outside hardware interact with its ecosystem.
Robinhood Co-Founder to Step Down as Creative Chief
Robinhood Markets co-founder Baiju Bhatt will no longer serve as an executive at the company whose app helped facilitate a meme-stock craze.
Bhatt has been at or near the helm of Robinhood, an online brokerage that offers everyday investors an easy-to-use interface, since its inception in 2013. The company said on Thursday that he would step down from his role as chief creative officer to pursue other entrepreneurial interests.
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Expected Major Events for Friday
00:01/UK: Mar UK Consumer Confidence Survey
07:00/GER: Jan Foreign trade price indices
07:00/DEN: Feb Central Government Finance & Debt
07:00/UK: Feb UK monthly retail sales figures
07:00/NOR: Feb Credit Indicator C2
08:00/SWI: 4Q Balance of Payments
08:00/SPN: Jan Industrial Orders & Turnover
09:00/POL: Feb Agricultural prices
09:00/GER: Mar Ifo Business Climate Index
10:00/LUX: 4Q Balance of Payments
11:00/IRL: Feb WPI
11:00/UK: Mar CBI Industrial Trends Survey
13:00/POL: Feb Broad money M3
14:00/BEL: Mar Business Confidence Survey
15:59/GRE: Jan Balance of Payments
16:59/SPN: 4Q Quarterly Balance of Payments
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This article is a text version of a Wall Street Journal newsletter published earlier today.
(END) Dow Jones Newswires
03-22-24 0116ET
