Nikkei 40,000, Bitcoin 65,000, OPEC and Central Banks In the Spotlight

Equity markets continue to steamroll through big round numbers with the latest being the Nikkei reaching the 40,000 level overnight for the first time in decades. Positive momentum from Asia Pacific trading has slowed as Monday progresses. European markets are mixed with the Dax flat and the FTSE down 0.6%. US index futures are trading flat to down 0.3% with Dow Futures leading the way lower. Cryptocurrencies continue to attract speculative attention from traders with Bitcoin soaring 4.1% and clearing the 65,000 level.

After dropping on Friday, the US 10-year treasury note yield has bounced back above 4.20% this morning, while the German 10-year Bund yield is steady near 2.40%. Fed Chair Powell testifies to Congress on Wednesday and Thursday with investors looking for clarification on comments made by Fed Governor Waller on Friday about potential changes to the Fed’s asset mix and QT program. Investors may also look for comments on what the Fed is going to do when last year’s emergency bank support runs out this month and Powell’s outlook for interest rates.

The Bank of Canada meets on Wednesday and the European Central Bank meets on Thursday which investors may look to for hints on when or if interest rate cuts may be coming. Outside of the central banks, the main economic news is US Nonfarm Payrolls, Canada jobs and wage inflation on Friday.

US Crude Oil is down 0.4% and has slipped back under $80.00/bbl after OPEC+ announced over the weekend that it is extending its current supply cuts through to June. Natural Gas has popped 7.5% in late winter trading. Metals trading is mixed with Gold down 0.2% and Copper up 0.2%.

The main part of earnings season is now over but there are still some results trickling out this week, including from clothing retailers in the US and mid-tier energy companies in Canada. There are also a few notable reports from technology companies headlined by Constellation Software* on Wednesday, then Broadcom*, Oracle, and also Costco on Thursday.  

*Shares of Constellation Software and Broadcom are held in portfolios managed by SIA Wealth Management.

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