European shares and the session higher

German Dax closes at a new record. France’s CAC just off all time highs

The European major indices are ending the session higher with the German Dax closing at a record level. France’s CAC is stalled just ahead of its all time high today.

A snapshot of the levels shows:
  • German Dax, +0.7%
  • France’s CAC, +0.59%
  • UK FTSE 100, +0.35%
  • Spain’s Ibex, unchanged
  • Italy’s footsie MIB, +0.25%
France’s CACs all time high is up at 6111. The high price reached 6106.12 today.  The German Dax reached a new all-time high of 15110.92.
German Dax closes at a new record. France's CAC just off all time highsT
In other markets as London/European traders look to exit:
  • Gold is up $20.60 or 1.21% at $1728.20.
  • Silver is up $0.35 or 1.45% at $24.77
  • WTI crude oil futures are up $0.56 or 0.91% at $59.70. The remains between the high price of $60.83 and the low price of $58.91 as OPEC+ meet
  • Bitcoin relatively unchanged at $59,027 (up about $70)

a snapshot of the US stock market is showing:

  • S&P index up 34.85 points or 0.88% at 4007.73. The index is above the 4000 level for the first time ever
  • NASDAQ is up 197 points or 1.48% at 13443
  • Dow is up 132 points or 0.40% at 33114

In the US debt market, yields continue to move lower:

  • 2 year 0.154%, -0.6 basis points
  • 5 year 0.8945%, -4.4 basis points
  • 10 year  1.675%, -6.6 basis points
  • 30 year 2.34%, -7.0 basis points
The USD open the day mixed but mostly higher at the start of the NY session. As London/European traders look to exit, the USD continues to weaken and stands just behind the CAD as the weakest of the majors.  Lower yields are pushing the green back lower. Gold is also a negative for the dollar.
The jobless claims for worse than expected, but the four week moving average trend more to the downside. The market PMI data came in as expected (marginally higher than the preliminary). The ISM manufacturing data is much better than expectations.

OPEC debates gradual increases in May, June and July

Slow return of oil to the market

OPEC+ is debating a gradual increase of 350K bpd in May, 350K bpd in June and 400K bpd in July, according to a report.
WTI touched the lows of the day at $58.91 shortly before this as the Saudi effort towards a two-month rollover failed and talk of a Saudis reversing their 1 mbpd voluntary cut did the rounds.
The market likes the sound of this slow increase in production but that will also depend on what Saudi Arabia does afterwards with the 1 mbpd voluntary cut.
Update: Another report is saying Saudi Arabia has proposed bringing back 250K bpd of its production in May, the same in June and the final 500 kbpd in July.

S&P 500 set to start off April near record territory

US stocks set for gains

S&P 500 futures are up 16 points after yesterday’s 14-point gain. In a sense, the gain will only wipe out the losses in the final minutes of trading yesterday — a drop that was due to quarter-end rebalancing.
Yesterday’s high was 3994, so it will take a 22-point gain to get there.
Meanwhile, tech is looking better with Nasdaq futures up 1%.

US initial jobless claims 719K vs 675K estimate

US initial jobless claims and continuing claims for the current week

US initial jobless claims and continuing claims for the current week
  • Prior week. Revised lower to 658K
  • Initial jobless claims 719K versus 675K estimate
  • Initial jobless claims 4 week average 719 versus 729.5 last week.  This it is the lowest level since March 14, 2020
  • Continuing claims 3794K vs 3750K estimate.  Prior week revised to 3840K vs 3870K initial reported
  • Continuing claims 4 week average 3978.5K vs 4125.75K last week.
  • During the week ending March 13, 50 states reported 7,349,663 continued weekly claims for Pandemic Unemployment Assistance benefits (vs 7,735,491 last week), and 51 states reported 5,515,355 continued claims for Pandemic Emergency Unemployment Compensation benefits (vs 5,551,215 last week).
  • The largest increases in initial claims for the week ending March 20 were in Massachusetts (+11,386), Texas (+7,599), Connecticut (+4,170), Maryland (+2,605), and Virginia (+2,035),
  • The largest decreases were in Illinois (-55,580), Ohio (-45,808), California (-13,331), New York (-4,251), and Florida (-2,991).
The claims move back above 700K but the four week averages are still trending to the downside.  The policymakers at the Fed are likely still concerned about the high levels for the initial claims.  The pre-pandemic levels were around 250 – 280K.

Pfizer says its coronavirus vaccine appears highly protective against South Africa variant

Pfizer remarks in updated data on its COVID-19 vaccine

  • Vaccine is around 91% effective at preventing COVID-19 (down from 95%)
  • Vaccine was 100% effective in preventing illness among trial participants in South Africa, where the B1351 variant is dominant
  • Vaccine was 100% effective in preventing severe disease as defined by the CDC
  • Vaccine was 95% effective in preventing severe disease as defined by the FDA
The headline will make for comfortable reading amid fears that the virus variants will throw a wrench in the works on the global recovery. That said, the trial sample size in South Africa is rather small i.e. 800 participants only.
Pfizer also adds that there were no serious safety concerns observed in all trial participants for up to six months after the second dose was administered.

OPEC+ JMMC reportedly notes that oil stocks remain above 2015-19 average

Reuters with the headlines, citing sources who have seen a document after the OPEC+ JMMC meeting yesterday

  • OPEC+ JMMC recognises that prevailing volatility in oil market structure is a signal of fragile market conditions
If anything, the document seems to be leaning towards a suggestion to maintain production cuts – which is what is expected – in the decision today. But we’ll see if OPEC+ members will have the propensity to surprise later on in the day.
Oil is keeping steadier, up by 1.2% to $59.90 after the late drop yesterday below $60.
Update: The document adds that OPEC+ JMMC recommends to extend “compensation period for overproduction” until September 2021.
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