Market Commentary: Thursday 4th April

2024 is looking like it could be the Year of the 'Cs'. Cocoa and Crypto markets have been out performers and now Coffee is joining this collection.  Arabica coffee has very low world stocks and we are seeing price squeezes in the futures markets, but could it be the Year of Rate Cuts?

The ADP employment number yesterday was 183K vs. 150K expected and yet Central banks are obviously determined to cut. When I read about Taiwan’s earthquake disrupting chip production at TSMC and OPEC reports that 14% of Russia’s refining capacity has been taken out by Ukrainian attacks, I am not convinced the inflationary pressures are over.

Market wise Gold made a brief new high of $2,300, while Brent Crude just failed to get back to $90, but still sits at $89 per barrel. Bitcoin fell 0.5% to $65,432.33, Ether fell 0.7% to $3,285.8, the yield on 10-year Treasuries advanced two basis points to 4.37%. Cable bounces back to 1.2650 and USDJPY still sit at 151.64, with intervention fears capping any rallies.

As for the day ahead we have global services PMIs, US Challenger job cuts, US Initial Claims, the ECB’s account of the March rate decision, the US and Canadian trade balance and in terms of central banks, we get the Fed’s Harker, Barkin, Goolsbee, Mester, Kashkari, Musalem, and Kugler. Today is Tomb Sweeping Festival in China and the Asian session has been relatively quiet.

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