Daily Market Outlook, March 31, 2023Month & Quarter End Flows Retain A Bid Tone, Could PCE Data Be A Party Pooper?Asia equity markets were mostly trading in the green as investors marked up month and quarter end, following the positive flows from Wall Street, as tech once again lead the bullish charge, with the Nasdaq teetering on the edge of bull market territory, as markets are increasingly pricing rate cuts into year end as such leading investors to allocate to growth stocks. The Nikkei notched up 1%+ gains as the end of the fiscal year saw investors push the benchmark over the 28K level as Chinese PMI’s printed a 12 year high leading to out performance in the Hang Seng as JD.com plans to spin off and separately list its industrials and property units following Alibaba’s lead earlier in the week. Earlier this morning the UK GDP print added to risk appetite as it printed a 0.1% gain for GDP in Q4 of 2022 exceeding the 0% expected outdoing the widely expected stagnation.Investors in the Eurozone will parse March annual CPI inflation data this morning to where many market watchers expect it to print its largest drop in 12 months with a 7.3% from 8.5% 12 months prior. France, Germany and Spain, have all hinted at a substantial retreat that is primarily driven by a sharp decline in wholesale energy prices. The European Central Bank will also be keen to see what core inflation has to say where many market watchers expect a rise to 5.9% from 5.6% prior, this will likely lead to another round of rate increases in the Eurozone as ECB officials will see this levels of inflation warranting further restrictive monetary policy. Stateside February data for the Federal Reserve’s preferred inflation gauge the consumer expenditure deflator is believed to demonstrate a modest retreat in overall inflation to 5.2% from 5.4% in January, the core metric may print a minor uptick to 4.8% from 4.7% prior, once again leaving Fed officials focused on the inflation fight. FX Options For 10am New York Cut EUR/USD: 1.0850 1.2B 1.0950 1.1BUSD/CAD: 1.3600 1.5B 1.3900 1.2BCitiFX preliminary estimate of month-end FX hedge rebalancing flows points to moderate U.S. dollar selling against all major currencies except the euro. Although fixed income performed strongly across the board, our model suggests that both international equity and fixed income investors will likely be USD sellers this month-end,Japanese investors’ needs to increase hedges on well-performing foreign fixed income strengthen the need to buy the yen and sell the dollar, although strong performance of European and UK fixed income weakens the buy signal for euro and sterling.Overnight News of NoteAsian Shares Ride High In Q1 But Steel For Inflation DataUS Stock Futures Are Flat Thursday Evening, Awaiting US PCEFed Officials See More Work On Inflation Despite Bank StrainsFed’s Emergency Loans To Banks Fall In Sign Of Easing TurmoilBiden Calls On Regulators To Harden Rules For Regional BanksWhite House Attempts To Keep China Calm Over Taiwan VisitsChina Recovery Gains Traction As Spending, Construction RisesBoJ Set To Lower Bond Buying As Yields Drop On Banking WoesIMF Report BoJ Should Avoid Premature Exit From Policy EasingTokyo Inflation Slows Ahead Of BoJ Leadership Change To UedaRBA Pause Bet Bolstered By Strongest Bond Auction Since 2021UK Set To Join Indo-Pacific Trade Bloc In Major Post-Brexit PactFinland Clears Last Obstacle To NATO Entry With Turkey’s Nod(Sourced from Bloomberg, Reuters and other reliable financial news outlets)Technical & Trade ViewsSP500 Bias: Intraday Bullish Above Bearish Below 4030Primary resistance is 4078Primary objective is 3804Above 4040 opens 407820 Day VWAP bullish, 5 Day VWAP bullishEURUSD Bias: Intraday Bullish Above Bearish below 1.0830Primary support is 1.07Primary objective is 1.1128Below 1.0700 opens 1.066020 Day VWAP bullish, 5 Day VWAP bullishGBPUSD Bias: Intraday Bullish Above Bearish below 1.2280Primary support is 1.2200Primary objective 1.2411Below 1.2170 opens 1.210020 Day VWAP bullish, 5 Day VWAP bullishUSDJPY Bias: Intraday Bullish above Bearish Below 133.00Primary resistance is 135.15Primary objective is 129.15Above 136 opens 137.9020 Day VWAP bearish, 5 Day VWAP bearishAUDUSD Bias: Intraday Bullish Above Bearish below .6696 Primary resistance is .6740Primary objective is .6950Below .6560 opens .645020 Day VWAP bearish, 5 Day VWAP bullishBTCUSD Intraday Bias: Bullish Above Bearish below 26500Primary support 23000Primary objective is 30000Below 23000 opens 2240020 Day VWAP bullish, 5 Day VWAP bullish
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