Tuesday's Markets Update (April 2, 2024)

02 Apr 2024 by rate3

On Tuesday, stocks dropped sharply as strong economic data (job openings, factory orders) dimmed hopes of a Fed rate cut in June. Tesla slumped due to lower-than-expected deliveries. On world markets, silver is up on growing geopolitical threats, Eurozone production activity remains subdued, the Euro weakened on ECB rate cut expectations, and the Indian rupee depreciated as regulators aim to compete with China. BTC and ETH continued their vertical downfall alongside stock indexes, dropping another 7% each. Some other major coins, including Uniswap and Avalanche, shrank by more than 8%.

Details

Job openings rose to 8.76 million in February, exceeding expectations. Gains were seen in finance, government, and some service sectors. Openings fell in information technology and federal government. Job growth varied regionally, with the West showing the strongest increase. (BLS)

Crypto

Singapore tightened crypto rules (PS Act) to protect users and ensure financial stability. All crypto businesses, even those indirectly involved, must comply. Regulations apply to cross-border transfers. The Monetary Authority of Singapore (MAS) oversees these measures to combat money laundering and terrorism financing. (source)

World Markets

Eurozone factory activity (PMI) remained in decline for March, but the rate softened. This revision to 46.1 reflects improving supply chains and a slower drop in output. New orders and exports also fell less sharply. Despite some optimism, job cuts continued due to weak growth expectations. (SP)
German inflation eased to 2.2% in March, the lowest in nearly 3 years, meeting market expectations. This brings it closer to the ECB's target of 2%. Both overall and EU-harmonized rates declined. Food and energy price drops led the slowdown, while services inflation rose slightly. Core inflation also dipped to its lowest level since mid-2022. (DE)
French manufacturing PMI dipped in March, extending a 14-month decline. However, the drop slowed, with some restocking and backlog clearing. New orders contracted further, leading to job losses. Despite this, manufacturers remain optimistic about future demand due to expected economic improvement. (SP)

Currencies

The euro weakened to a near two-month low below $1.08. Investors expect the ECB to cut rates more than the Fed this year as German inflation slows to a 20-month low of 2.2%. While French inflation dipped, rates in Italy and Spain rose slightly.
The Indian rupee weakened past 83.4 to the dollar, near a record low. This is due to expectations of less central bank support (RBI) and potential weakening of the Chinese yuan (PBoC). A weaker rupee could help Indian exports compete with China's. High energy prices also pressured the rupee as India imports oil and coal.

Commodities

Silver surged past $25.50 per ounce, a year-high, on Middle East tensions and safe-haven demand. Industrial use, like solar panels backed by IKEA's EV grant, also boosted prices. However, strong US economic data dampened hopes of an immediate Fed rate cut, sending those bets below 60%. Investors now focus on jobs data and Fed speeches for clues on future rate changes.