Our Daily Notes

05.04.2024 10:20 Geopolitical risks and Fed speeches determine pricing… Yesterday, with the news flows based on US-Israel and Israel-Iran, Brent oil prices closed above $90 for the first time since October 2023. Comment: As Geopolitical Risks Increase, it is almost certain that prices will exceed the $100 band. When it comes to October 2023, of course, what comes to mind is the beginning of moving away from “higher for longer” pricing. Kashkari’s statement yesterday that “there may not be a rate cut in 2024” is quite ambitious. Kashkari’s base scenario is two cuts and he has no voting rights in 2024. Mester, another member with voting rights, states that they are approaching the “confidence level required for a rate cut”. With the rise in oil prices, the increase in geopolitical risks and Kashkari’s speech, the S&P 500 experienced a solid sale “in the second half of the session”. The index closed the day 1.2% down. Even the energy sector closed in the red… On the other hand, demand for US Treasury bonds increased. Gold and silver saw some profit taking despite geopolitical developments since they started April strongly. … The dollar index closed in the red yesterday. The increase in geopolitical risks did not increase demand for the dollar. After the Kashkari speech, EURUSD fell to 1.0820 at 1.0880, but is still above last week’s close (1.0790). The BOJ chairman stated that there may be a rate hike in the second half of the year. Yen is positive & Nikkei 225 is negative. Today’s US TDI data is quite important. We will share the details after the data.