🌐 Macro-News round-up

🌍 US Treasury Secretary Janet Yellen focuses her statements on the geopolitical context against Russia: “I urge European banks to heighten compliance measures and increase focus on Russian evasion attempts. The Global economy is resilient in the face of a challenging geopolitical landscape. US Treasury continues to explore new ways to reduce Russia’s revenues and acquire goods for its war in Ukraine”.

πŸ‡ͺπŸ‡Ί Europe:

  • Germany’s PPI index released this morning shows a slight weakening, falling to 0.2% versus 0.3 expected, and unchanged from the previous period. The positive reading of this is that it will not put upward pressure on inflation. The negative reading is that it would indicate little strength in German industrial activity.
  • Europe’s trade balance improves, both with respect to expectations and with respect to the previous period. A surplus of EUR 24.1 billion is achieved in March versus expectations of EUR 19.9 billion.

πŸ’Ή Markets:

  • US futures remain strong. The Nasdaq 100 moves tentatively above the highs. Mini SP500 futures, however, still remain around the 533330 level. There seems to be some fear among buyers.
  • US bond yields have paused, but remain strong. As of yesterday, the 2-year bond is yielding close to 4.80. Expectations of a rate cut in September are falling and are reflected in bond prices.
  • In this context, one would expect a strengthening of the dollar; however, the dollar index is weakening, currently trading below 105 points. Consequently, the EURUSD seems to be consolidating above 1.0850. Remember, bullish moves in this pair are likely to attract stronger bearish inflows in the future, the reason being that from a fundamental perspective, the ECB rate cut will come before the Fed rate cut, and this coupled with more attractive yields in the US bond will cause capital to shift from the Euro to the Dollar, turning the EURUSD into a bear market.
  • In Europe, despite today’s relatively good data, the DAX40 index, rejected from the last hours a high, which could complete a bearish shoulder head shoulder figure, projecting the price, deactivate, towards the 18,400 points environment, which would make this, a bearish week for Europe.

πŸ›’οΈ Commodities:

  • Crude oil remains weak, trading below $83 a barrel Brent. Gold breaks new highs and reaches $ 2450 per ounce. It is now falling back to $2417.
  • Bitcoin resumes its upward momentum and trades back above $70,000. It currently stands at $71,030.
  • Bloomberg has published a fascinating article on copper. It states that the record highs in copper, which we talked about in the previous report, are not caused by strong demand from China, which in fact is rather weak, but by strong bullish speculation on the metal. Such speculation would be fueled by the belief that copper is the new oil in the age of renewable energy and electric vehicles. Moreover, the idea that there could be limited production in the future, coupled with warnings from the International Energy Agency, encourages speculators that, in the face of a possible shortage, prices could shoot upwards.

🌐 Geopolitics:

  • Yesterday’s arrest warrant by the International Criminal Court ICC divides Europe. EU Foreign Secretary Joseph Borrell appealed for the ICC’s decision to be respected in the face of comments from the governments of some European states: Germany said it respects the ICC but has concerns on jurisdiction/complementarity between Israel and Palestine. Czechia called the decisions “appalling” and said Hamas’ October attack caused current Gaza suffering. The UK criticized the timing as unhelpful for reaching a ceasefire. Italy said equating Israel and Hamas is unacceptable. Belgium said crimes in Gaza must be prosecuted at the highest level. Ireland, Slovenia called for respecting the ICC’s independence and impartiality. Austria questioned Hamas and Israel being mentioned together.
  • Speculation is beginning to emerge about the accident that killed the Iranian president and foreign supplies. Israel clarified, in any case, within hours of the accident, that they had nothing to do with it. However, the accident certainly puts Iran in a complicated domestic situation. Iran must call a general election after the death of its president, and the country is torn between mourning and celebration.
  • Ukrainian war: Today was Zelensky’s last day as president. He proclaimed martial law and annulled the elections. He has officially become a dictator. In the meantime, piles of public money continue to flow from our countries to Ukraine, without consulting the citizens on the decision. Let us remember the words of Jean-Claude Juncker, former President of the European Commission: β€œAnyone who has had anything to do with Ukraine knows that this is a country that is corrupt at all levels of society”.

Have a nice day.