US Equity markets closed the week on a weaker note after S+P notched up another record high. The first triple witching for 2024 is behind us. Stocks saw a volatile session marked by a significant options expiration and a major tech sell-off. US Economic numbers provided little inspiration to any hope of a sustained rally. YoY data for Capacity Utilization, Industrial Production and Manufacturing were all weaker than expected, which is not a good sign for a sustained rally in equities. Investors are waiting for the Federal Reserve's decision next Thursday on interest rates. Recent data showed higher-than-expected CPI and PPI figures. This has led to speculation that potential interest rate cuts might be postponed until later in the year. This has been our thinking for some time. Gold and Silver continued to gain, with Silver leading the charge up 3.6% for the week and 15.97% for the year. Oil, based on a technical level, has broken out, fundamental news concerning tightness in supply, drone attacks in Russia by the Ukraine and Middle Eastern tensions are all contributing to the move higher. The break is significant and could lead to a mover through to US90.00. This will potentially have a flow on an event, especially for energy inflation, and hence, decisions from the Fed to delay any easing. Monday, important Industrial Production and Retail Sales data from China will confirm whether or not a recovery is on the way. 

But first, US equity markets exhibited mixed sentiments during the week, characterized by a slight downturn despite the S&P achieving another record high. The first triple witching for 2024, a period marked by the simultaneous expiration of stock options, stock index futures, and stock index options, has passed, leaving behind a volatile trading session. Stocks experienced heightened volatility, underscored by significant options expiration and a notable tech sell-off. 

While the S&P notched up another record high, the broader sentiment remained subdued, with economic concerns overshadowing the market's optimism. US economic indicators, particularly year-over-year data for Capacity Utilization, Industrial Production, and Manufacturing, fell below expectations. These weaker-than-expected figures raise concerns about the sustainability of the market rally, highlighting potential headwinds for equities in the near term. 

Amidst concerns about the economy, investors are eagerly awaiting the Federal Reserve's decision on interest rates, scheduled for next Thursday. Recent data revealing higher-than-expected CPI and PPI figures have fueled speculation that potential interest rate cuts may be postponed until later in the year. This shift in expectations underscores the cautious stance adopted by market participants, who are closely monitoring economic indicators for signs of improvement or further weakness. The Federal Reserve's monetary policy decisions play a crucial role in shaping market sentiment and investor confidence, with implications for asset prices and market volatility. The chances of a rate cut in the US at this meeting are zero, and for a June cut, it stands at 55%.

In the midst of economic uncertainties, precious metals and oil have emerged as favored investment options, driven by a combination of market trends and geopolitical factors. Gold and silver continued their ascent during the week, with silver leading the charge with gains of 3.6% for the week and an impressive 15.97% for the year. The surge in precious metals prices reflects investor concerns about macro events pushing inflation and economic uncertainty, driving demand for safe-haven assets.

Oil prices experienced a notable breakout, propelled by fundamental factors such as supply constraints and geopolitical tensions. Events such as drone attacks in Russia by Ukraine and escalating tensions in the Middle East have further fueled the upward momentum. The significance of this breakout cannot be overstated, with potential implications for a move towards US$90.00 per barrel. Such developments have far-reaching consequences, particularly in terms of energy inflation and monetary policy decisions. 

Looking ahead, all eyes are on Monday's release of crucial Industrial Production and Retail Sales data from China, which will provide critical insights into the potential for economic recovery. China's economic performance has significant implications for global growth and market sentiment, given its status as the world's second-largest economy. Positive data indicating an uptick in industrial production and retail sales could bolster market confidence, while weaker-than-expected figures may raise concerns about the pace of economic recovery.

Moreover, China's economic data will be closely monitored for signs of the impact of recent policy measures aimed at stimulating growth and addressing structural imbalances. Any divergence from market expectations could influence investor sentiment and asset prices, shaping global market dynamics. As investors await the release of China's economic data, market participants must remain vigilant and adapt their investment strategies to navigate evolving market conditions.

On the position front, we added to … USD/JPY position at 147.75 whilst holding on to the … at 150.44. … in the Dow (38 576) and S+P (5036). In the other currencies, we are still …, both the AUD/USD (US0.6770) and AUS/CHF (0.5707). In the bullion market, we are happy to … in both Silver (US23.19) and Gold (US2046).

Trade Focus:

Fundamentals:

S+P500: US Equity markets remain tenderly on their highs. The only positive aspect…

Technical Analysis:

The chart looks overbought on a daily and weekly basis…

Support              …

Resistance         …

Momentum        …