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On February 13th, JPMorgan strategists recommended selling two-year U.S. Treasury bonds as a "tactical" move, arguing that the U.S. economic growth outlook remains robust, making it difficult for the Federal Reserve to cut interest rates significantly. The strategist team wrote in a report, "The economic fundamentals are strong, and once Kevin Warshs nomination is confirmed and he takes over as Fed chair, it will be very difficult for him to influence the decisions of the Federal Open Market Committee (FOMC)." The U.S. will release a key inflation report on Friday, which could provide clues to the Feds next move. If it shows easing price pressures, demand for short-term, policy-sensitive Treasuries may rise. This week, Treasury yields fluctuated, influenced by a sell-off in tech stocks and strong U.S. jobs data, sparking discussions about how Warsh, Trumps nominee for next Fed chair, will handle policy.On February 13th, Futures News reported that regarding refining costs, crude oil prices rose due to geopolitical risk premiums, resulting in high refining costs. Gasoline wholesale prices rebounded before the holiday, leading to a corrective improvement in the gasoline refining spread. Diesel demand remained weak, with wholesale prices hovering at low levels, causing the diesel refining spread to continue declining. As of the crude oil closing price on February 11th: the domestic gasoline refining spread was 791.74 yuan/ton, a rebound of 63.23 yuan/ton compared to the end of January; the domestic diesel refining spread was 214.31 yuan/ton, a decrease of 51.54 yuan/ton compared to the end of January. The high crude oil costs are unlikely to diminish their suppressive effect on gasoline and diesel refining spreads in the future.Huawei Chinas official Weibo account announced that the Huawei China Partner Conference 2026 will be held from March 19th to 20th.February 13th - The National Hydrogen Energy Storage and Transportation Equipment Quality Inspection and Testing Center (Guangdong) has recently received formal approval from the State Administration for Market Regulation for its establishment. The Guangdong Provincial Special Equipment Inspection and Research Institute (Guangdong Provincial Special Equipment Accident Investigation Center), under the Guangdong Provincial Administration for Market Regulation, is responsible for its construction. The establishment of this center is an important measure by the State Administration for Market Regulation to promote the construction of a manufacturing powerhouse and a quality powerhouse, marking a new stage in the high-quality development of the hydrogen energy industry in South China. Located in Foshan, a hydrogen energy industry cluster, the center will provide crucial support for the safe development, technological innovation, and standard setting of the hydrogen energy industry in the Guangdong-Hong Kong-Macao Greater Bay Area and even nationwide.Japanese Finance Minister Satsuki Katayama: The next fiscal budget is likely to be very different from previous budgets.

EUR/USD Expects Fourth Weekly Gains Above 1.0900 Despite The US Dollar's Rebound Advance Ahead Of US NFP

Daniel Rogers

Apr 07, 2023 11:42

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Despite a recent retreat, the EUR/USD bulls maintain control around 1.0920. This reflects the typical Good Friday inactivity and apprehension ahead of the US Nonfarm Payrolls (NFP) report released early in the day. The major currency pair was volatile on Thursday as a result of the US Dollar's initial rebound on fears of a recession, but ended the day unchanged as disappointing US data contrasted with stronger Eurozone data.

 

Fears of a recession in the world's largest economy were prompted by consecutive lackluster US data and falling US Treasury bond yields, giving USD bears a reprieve on Thursday morning. As traders prepared for the all-important NFP, the dollar's subsequent gains were reversed by another disappointing US employment report.

 

Despite this, US Initial Jobless Claims for the week ending March 31 rose to 228K from 200K anticipated and an upwardly revised 246K the prior week. Notable is the increase in Challenger Job Cuts from 77,77K to 89,703K in the given month.

 

Notably, Reuters fanned fears of a recession by citing the most recent decline in the preferred bond market indicator of Federal Reserve (Fed) Chairman Jerome Powell. The most reliable bond market indicator of an imminent economic contraction, according to Federal Reserve research, is the "near-term forward spread" between the forward rate on Treasury bills 18 months from now and the current yield on three-month Treasury bills.

 

According to Reuters, International Monetary Fund (IMF) Managing Director Kristalina Georgieva stated in prepared remarks on Thursday that the global economy is projected to expand by less than 3% in 2023, a decrease from 3.4% in 2022.

 

In other news, Germany's Industrial Production (IP) increased 0.6% year-over-year in February, versus market predictions of -2.7% and previous readings of -1.7%. Additionally, the monthly figures exceeded expectations by 0.1%, coming in at 2.0% compared to 3.7% previously. On Wednesday, Germany Factory Orders for February improved to -5.7% YoY from -12.0% previously revised down and -10.5% market expectations, while MoM growth came in at 4.8% compared to 0.3% expected and 0.5% previous readings.

 

Wall Street and US Treasury bond yields have both reduced weekly losses as a result of these strategies, but investors remain skeptical.

 

In the context of less liquidity surrounding the March US employment report, sporadic activity on the major markets can keep the EUR/USD inactive and prone to abrupt price swings. Notable is the fact that recent dovish Fed forecasts and disappointing US data generate expectations for a positive surprise and enormous price volatility thereafter.


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