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Royal Bank of Canada: Lowered its target price for Broadcom (AVGO.O) to $340 from $370.On March 2nd, Canadian Prime Minister Mark Carney met with Indian Prime Minister Narendra Modi in New Delhi, aiming to repair bilateral relations. Both leaders hoped to reach an agreement to boost trade and supply chains. They are expected to announce an agreement to expand Canadian uranium exports to India and finalize the scope of negotiations for a trade agreement, highlighting their efforts to diversify their trade partnership and reduce reliance on the United States. Carneys four-day visit to India marks an attempt by both countries to repair bilateral relations, which have been severely strained in recent years. Over the past year, the two sides have engaged in closed-door cooperation to strengthen cooperation and information exchange on security-related issues. The two leaders have also been working to enhance cooperation in trade and technology. Canada has previously stated that it expects a trade agreement between the two countries to double bilateral trade to C$70 billion by 2030.March 2nd - The Ministry of Transport released data on the smooth operation of national logistics from February 23rd to March 1st. National railways transported 72.102 million tons of freight, a 9.77% increase compared to the previous period; 32.717 million trucks traveled on national expressways, a 229.69% increase; monitored ports handled 234.892 million tons of cargo, a 25.2% increase, and 5.952 million TEUs of containers, a 6.42% increase; civil aviation handled 137,000 flights (including 3,087 cargo flights, comprising 2,162 international and 925 domestic cargo flights), a 4.31% increase; postal and express delivery volume reached approximately 4.231 billion pieces, a 424.94% increase; and delivery volume reached approximately 3.543 billion pieces, a 462.38% increase.March 2nd - Analysts say the US dollar strengthened against most currencies in Asian trading hours as potential conflicts in the Middle East could trigger demand for immediate liquidity. Vishnu Varatan, head of macro research at Mizuho Securities, stated that the dollar is likely to maintain its buying advantage due to the "cash is king" mentality. This could be further reinforced by the greater weakness of the euro and most other non-oil currencies, which are increasingly vulnerable to Middle East geopolitical risks and have greater susceptibility to negative impacts on energy security under high energy costs.Bank of Japan Deputy Governor Ryozo Himino: Even if the overall inflation rate falls below 2%, we may still raise interest rates to a neutral level if we judge that underlying inflation is accelerating toward our price target.

Global Macro Analysis

Cory Russell

Apr 07, 2022 11:35


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The S&P 500 index fell 1.0 percent on Wednesday. US 2s10s steepened even further, with 10yr rates rising 5 basis points to 2.6 percent, the most in three years, and 2yr yields falling 5 basis points to 2.47 percent. The price of oil has dropped by 4.7 percent.


I won't go into detail about the FED minutes since Vice-Chairman Brainard has previously laid the groundwork.


The global bond market resumed its sell-off after a March respite, causing a worsening in cross-asset risk sentiment, with global tech equities suffering the brunt of the fallout.


In a high-inflation climate, reducing the balance sheet is a substantial source of market uncertainty. However, despite the build-up of economic and geopolitical headwinds over the previous several weeks, stock markets were overbought to a great extent, so this is simply a corrective move to a more sensible level.


The major source of worry seems to be rates, so if rates manage to stabilize, we may see a systematic bid return. However, if interest rate volatility remains high, stocks may continue to be under pressure.


The overnight movement in US transport equities is the latest in a long line of smoke signals the market is sending about recession fears. No market analyst is predicting a recession with too much speed in the economy, but that does not rule out the possibility that some of the signs of one are beginning to appear.


The overall picture has shifted from a certain mid-cycle situation a month or two ago to a late-cycle likelihood presently. I've been preaching about the compressed nature of market cycles since Covid's inception, and the most recent adjustment took weeks rather than a year. Another illustration of the ticker tape's ruthlessness and the speed with which key pivots are priced.


The point is that, similar to the 2's10's inversion, although we may argue about the likelihood of a recession and if the Transports move is a signal for one, the viciousness of pricing actions has pushed people's hands whether they believe in them or not.


Even though one swallow does not make a spring, it seems that the market is concerned that the Fed is behind the curve, and that something like the Volcker adjustment is in the cards with that proviso in mind.

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