Israel and Hamas have not reached an agreement. Markets await US consumer price report

Markets await Wednesday’s US consumer price report to determine the direction of the dollar and indices. They also await the first quarter corporate earnings season, which begins this Friday with results from major banks, including JPMorgan Chase (JPM), Citigroup (C), and Wells Fargo (WFC).

UK retail sales in March 2024 rose by 3.2% y/y, the strongest increase since August last year, mainly due to the Easter holiday, which boosted food sales.

The Apr Sentix Eurozone Investor Confidence Index rose by 4.6% to a 2-year high 5.9%, stronger than expectations of 8.3%. German industrial production for February rose by 2.1% m/m, stronger than expectations of 0.5% m/m and the largest increase in 13 months. German trade data was mixed. German exports for February fell by 2.0% m/m, which was weaker than expectations of 0.5% m/m. Imports for February unexpectedly rose by 3.2% m/m vs. expectations of 1.2% m/m.

WTI crude futures rose to $86/bbl on Tuesday after falling to $84.3/bbl in the previous session as the latest ceasefire talks between Israel and Hamas in Egypt failed to progress. Israeli Prime Minister Benjamin Netanyahu said on Monday that Israel would continue the plans. A senior Hamas official also said they had rejected Israel’s latest ceasefire offer made at the talks in Cairo. Risks of further supply disruptions continued to drive oil prices higher as Iran vowed to retaliate against an alleged Israeli attack that killed Iranian generals in Syria.

Asian markets were mostly up yesterday. Japan’s Nikkei 225 (JP225) gained 0.91%, China’s FTSE China A50 (CHA50) declined 0.78%, Hong Kong’s Hang Seng (HK50) gained 0.05% over yesterday, and Australia’s ASX 200 (AU200) was positive 0.20%.

In Australia, consumer sentiment weakened for the second consecutive month in April as inflation and high-interest rates weighed heavily. A Westpac report said that while the Reserve Bank of Australia (RBA) has signaled that rates are unlikely to rise, it needs more confidence in the inflation outlook to consider cutting rates. Markets had been betting that the central bank would start cutting rates later this year, but robust employment data and rising house prices dampened the outlook. Meanwhile, business confidence improved in March but remained below the long-term average.