North American central bank day finds US equity futures and the FTSE all quiet, and the DAX up 0.3%. Overnight, the Nikkei soared 2.9% and the Hang Seng climbed 0.6% boosted by stronger than expected trade data out of Japan.
Investor focus has turned from the war to central bank news. The Bank of Canada is expected to hold its overnight rate steady at 2.25% at its 9:45 am EDT decision, while the Fed is expected to hold the Fed Funds rate steady at 3.75% at its 2:00 pm EDT decision. The news will also include statements from both central banks plus FOMC member interest rate and economic forecasts. Investors may look to this supplemental information for a sense of the state of the economy, the impact of the war and the outlook for monetary policy.
Ahead of these decisions, US producer prices for February released this morning (3.4% vs Street 2.9%) suggest inflation pressures were starting to build ahead of the war. US factory orders (Street 0.1%) are due at 10:00 am EDT. Central bank week continues with the Bank of Japan, the Swiss National Bank, the Bank of England and the European Central Bank all meeting Thursday, followed by the Peoples Bank of China on Friday.
Energy trading finds Brent Crude rallying 2.5% and trading above $105.00/bbl, while US crude is up only 0.2%, trading near $96.50/bbl suggesting a gap in performance may be opening. Gasoline is up 1.25%. Gold and Silver are both down 2.1%, and Bitcoin is down 2.9% suggesting investors may be expecting hawkish commentary from the Fed to shore up the US Dollar. Copper is down 1.2%. The Loonie is flat, and the Euro is down 0.2% ahead of today’s decisions.