Macro-News round-up:

#MarketNews

  • Europe’s consumer confidence index remains negative, but yesterday’s data came out relatively better than expected. Klaas Knot , President of the Dutch central bank, said that rate cuts in the first half of 2024 were unlikely given the current data.
  • In the US, the consumer confidence index rebounded above expected levels, 110.7 vs 104.5, momentarily generating a strong response in the dollar.  

    Existing home sales were also positive and better than expected.  Philadelphia Fed President, Patrick Harker, made a series of comments yesterday, stating that there is no need to raise rates further, but also clarified that the Fed will not simply cut interest rates, and that the soft landing process is likely to be bumpy, as many factors could frustrate it. 

    Recall that Atlanta Fed President Raphael Bostic said on Tuesday that there is currently no “urgency” for the Fed to cut US interest rates, given the strength of the economy.
  • US considers raising tariffs on Chinese electric vehicles (EVs) -WSJ. A twenty-five percent tax on Chinese cars is presently in place; it was imposed during the previous administration of Donald Trump and increased by his successor. 

    The report also stated that the U.S. administration is discussing Trump-era tariffs on some $300 billion worth of Chinese goods, with the goal of concluding a protracted assessment of the penalties by early next year. Another significant export hub for foreign automakers is China, where Tesla is based.
  • This afternoon we will see US Q3 GDP growth as well as initial jobless claims and the Philadelphia Fed’s manufacturing index report. 
  • Crude oil seems to finally move into buying mode. Yesterday’s US crude inventories showed a turnaround to positive, the US seems to be replenishing its crude stockpiles.

    In response to recent strikes by Yemeni Houthi terrorists affiliated with Iran, oil prices rose for the seventh straight session on Wednesday, amidst tensions in the Red Sea. As the largest shipping companies steer clear of one of the busiest shipping lanes in the world, worries over disruptions to global trade caused both benchmarks to rise more than 1% on Tuesday. Additionally, BP has suspended all oil supplies across the Red Sea.


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