Wall Street extended gains for the third straight session and closed higher on Friday, the last trading day of the month and quarter.  The Dow rose more than 400 points while the S&P 500 and Nasdaq added 1.4% and 1.7%, respectively.  The Fed’s preferred inflation measure, the US core personal consumption expenditures price index, came below expectations at 4.6%, in the latest signal that inflation peaked while sparking speculation that the Fed’s rate-tightening cycle could end soon.  Still, several Fed policymakers last week suggested more monetary tightening would be needed to tame inflation, even after the recent turmoil in the banking sector.  For the first quarter, tech shares booked top gains as the Nasdaq jumped 17.5%, while the Dow and the S&P 500 rose 0.4% and 7.4%, respectively.  In the Euro Area, markets also extended gains on Friday, with the Euro Stoxx 50 hitting a one-month high, and ending up 11.9% for the quarter. 

Summary as at 03.04.2023 

  • Most Asian shares crept higher on Monday as risk appetite persisted on softer-than-expected US inflation readings from last week, although a spike in oil prices saw markets remain wary of a potential resurgence in inflation over the coming months. 
  • European shares are headed for a flat start after a rally in oil prices weighed on US equity futures. 
  • Oil prices shot up as much as 8% this morning, hitting their strongest level in a month after OPEC+ announced a surprise production cut of 1.16 million barrels per day.  This complicates the outlook for inflation and interest rates, as investors had been betting that easing price pressures would give central banks room to pause the current tightening cycle. 
  • Data this morning showed growth in China’s manufacturing sector slowed in March, as production remained subdued amid weak international demand and as a post-Covid economic boom appeared to be running out of steam.  The Caixin PMI grew 50 in March, retreating from an eight-month high of 51.6 hit in the prior month.  The reading also missed expectations for growth of 51.7. 
  • The personal consumption expenditure price index in the US increased 0.3% month-over-month in February, easing from a 0.6% rise in January.  The cost of goods went up 0.2%, slowing from a 0.6% rise in January and services cost increased 0.3%, less than a 0.6% increase in the prior month.  Excluding food and energy, the PCE price index advanced 0.3%, slower than the 0.5% rise in January.  The annual rate eased to 5%, the lowest since September 2021.  
  • The consumer price inflation rate in the Euro Area eased to 6.9% year-on-year in March, its lowest level since February and slightly below the market consensus of 7.1%, data showed last Friday.  Still, the core index hit a fresh record high of 5.7%, putting pressure on policymakers to push on with further rate hikes.  On a monthly basis, consumer prices rose 0.9% in March, following a 08% advance in February.  
  • Media reports announced UBS will cut its workforce by between 20% and 30% after completing its takeover of Credit Suisse.  As many as 11,000 employees will be laid off in Switzerland and another 25,000 worldwide. The two lenders together employed almost 125,000 people at the end of 2022 — about 30% of them in the home country. In a separate development, Switzerland’s Office of the Attorney General said Sunday it had opened a probe into the takeover. 
  • Tesla Inc on Sunday posted record quarterly vehicle deliveries. Still, quarter-on-quarter sales growth was modest despite price cuts of as much as 20%, as rising competition and a bleak economic outlook weighed.  Tesla delivered 422,875 vehicles for the first three months of this year, up 4% from the previous quarter.  This was 36% higher than a year ago.  In January, CEO Elon Musk said Tesla could achieve 2 million vehicle deliveries this year, up 52% from last year.