Archives of “March 18, 2021” day

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Major European indices close the day with gains as flows move EU equities

  
Analysis, Global Indices

German Dax closes at a record high

The European shares are ending the session with gains across the board. The low funds is moving out of US lifeline overvalued tech stocks and into more beaten-down stocks of years gone by including the EU stocks.

The German Dax is the outperformer. It closed at a new record high.  France’s CAC is enclosed to its all-time high of 6111.41. The high price today reach 6082.92

The final numbers are showing:
  • German Dax, +1.23%
  • Francis CAC, +0.23%
  • UK’s FTSE 100, +0.29%
  • Spain’s Ibex, +0.5%
  • Italy’s 50 MIB, +0.4%

Fed focus moves to SLR exemption

  
  Analysis

Powell said Fed would make announcement “in coming days”

The Fed’s work isn’t done.
Temporary pandemic rules on bank supplementary leverage ratios (SLR) are set to expire on March 31 and there’s no clear indication on what the Fed will do.
Yesterday, Powell was asked about the SLR and offered nothing in response, saying only that an announcement would be made in the “coming days.”
I speculated that he may have wanted to keep the market’s focus on all the dovish news rather than what could be a negative for bonds — ending the SLR.
What’s challenging about the SLR is that there’s no consensus about whether or it will be done, or more importantly, if it’s even necessary.
Funding markets star Zoltan Pozsar from Credit Suisse thinks it will be ended and won’t matter but others think the opposite, as Zero Hedge details today.
Some think that the weakness in bonds today is tied back to the looming announcement.
Powell said Fed would make announcement "in coming days"
This is uncharted territory.
Here’s more from Bloomberg.
“We estimate the potential for about $200 billion in Treasury selling, with the potential for it to be even larger,” said BMO Capital Markets strategist Dan Krieter. He added that the outlook remains “extremely uncertain” because it’s not clear what banks’ capital demands will be going forward.

WTI falls through last week’s low

  
Analysis, Crude

WTI down $1.53 to $63.05

WTI down $1.53 to $63.05
Oil has fallen through last week’s low in the fifth consecutive day of declines.
Oil is now chewing into the OPEC pop and consolidating in the $60-67 range. The next big test will be the uptrend since $33.64 on the eve of the US election.
It’s run a long way on the reopening trade and it’s clear that OPEC+ isn’t playing around on tightening inventories. The Texas storm has skewed some of that and Europe looks like it will be slower-than-hoped to reopen so some strength is coming out.
I’m very bullish on crude though. Demand will come back to 2019 levels next year but production won’t. Investment in oil is falling and companies have been consistent in saying they’re not going to grow.
There’s also a good chance that demand is stronger than expected this year on the reopening given sensational car sales in the past year.

Nikkei 225 closes higher by 1.01% at 30,216.75

  
Analysis, Global Indices

A positive day for Asian equities, tracking US gains overnight

Nikkei 18-03
Risk sentiment is holding up ahead of European trading, with Asian stocks exuding a further sense of optimism after the more dovish Fed yesterday.
That said, the Nikkei has more or less halved its gains from earlier after a report suggesting the BOJ will expand its JGB yields target band from 0.20% to 0.25%. That will keep Japanese assets in a tricky spot going into BOJ meeting and review update tomorrow.
Meanwhile, the Hang Seng is up 1.6% and the Shanghai Composite is up 0.3% currently.
Elsewhere, S&P 500 futures and Nasdaq futures are flat while Dow futures are up 0.2%, all having trimmed earlier gains as the market weighs up the potential for further steepening in Treasury yields post-Fed.
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