In a letter delivered to Twitter yesterday, Elon Musk delivered a non-binding proposal to acquire all of Twitter stock not owned by the reporting person for all cash consideration valuing the stock at $54.20 per share.
Musk says this is his „best and final offer“ and that if it isn’t accepted, he would „need to reconsider my position as a shareholder“. Before yesterday, Musk held a 9.1% stake in the company after this move here.
Let the memes begin.

Let’s try to keep this short and simple.
There won’t be any changes in policy rates by the ECB today as policymakers are still in autopilot mode when it comes to that for the time being. In March, the ECB communicated that APP purchases should be wrapped up in Q3 with scheduled buying of €40 billion in April, €30 billion in May and €20 billion in June.
Based on that timeline and policy trigger (that rate hikes will only come after APP purchases end), that leaves some breathing space before any actual changes to policy rates. That said, with inflation still rampaging across the euro area, it is going to be a challenge for the ECB to try and maintain their composure on both fronts.
So, what can we expect from the ECB today?

In my view, the ECB will do what it does best. That is to kick the can down the road for as long as they possibly can afford to. However, there is a growing divide between policymakers in the central bank on the urgency to take action. As such, it isn’t going to be as straightforward as seeing the ECB sit on its hands.
The first thing to watch today will be any changes to the timeline of tapering. For now, Q3 remains the target but if the ECB brings that forward to Q2, that will start to see more hawkish undertones grow.
That said, the next policy meeting will be on 9 June so that does give the ECB some time to tinker with this. So, today may not likely be the day where they announce any hasty changes to the outlook and their plans.
As such, sticking with the status quo seems like the most viable option. And that perhaps poses some downside risk (or at least limits any major upside) to the euro and European bond yields, even if markets aren’t expecting much from the ECB today.
The next key thing to watch will be Lagarde’s press conference. The ECB will want to bide its time to wait on inflation data in the coming months before reacting. As such, Lagarde will have to try and communicate that in a clear and concise manner. Any error in communication could swing the euro either way and that is always a risk to be mindful about.
TLDR: Barring any unintended hawkish signals, the ECB is to stick with venting about the risks of higher inflation amid the Russia-Ukraine conflict while arguing to be data-dependent i.e. wanting flexibility. The door remains open for a rate hike later in the year but not before APP purchases are concluded, and that is still seen in Q3. That should keep EUR/USD between the 1.0800 to 1.0940 range at the moment.

China must continue strict „dynamic COVID-19 clearance“ policyMust not relax control and prevention measuresShould minimise COVID-19 impact on economic and social developmentThat won’t soothe much of the situation in Shanghai as the pressure continues in the key city, marking China’s largest outbreak since the start of the pandemic. For some context, Shanghai reported more than 25,000 cases once again in its latest update.

Prior -6.3%Market index 393.5 vs 398.5 priorPurchase index 261.8 vs 258.1 priorRefinancing index 1.109.0 vs 1,166.3 prior30-year mortgage rate 5.13% vs 4.90% priorThe average home loan rate in the US tops 5% for the first time since November 2018 as the latest survey notes that homebuyers are hurrying to make purchases before costs rise further. That said, the run up in costs has largely dampened sentiment in mortgage applications with overall activity slowing once again (the rise in purchases were offset by the drop in refinancing activity).

EPS $2.63 vs $2.69 expectedRevenue $31.59 billion vs $31.44 billion expectedEquities sales and trading revenue $3.06 billion vs $2.56 billion expectedFICC sales and trading revenue $5.70 billion vs $4.68 billion expectedFor the quarter, the firm posted a profit of $8.28 billion as compared to $14.3 billion a year earlier. Among the reasons cited were a slowdown in dealmaking brought on by the Russia-Ukraine conflict as well as a decline in trading revenue.But at least the firm is authorising a new share buyback plan of $30 billion. It looks like things are starting to get back to ’normal‘. 😉

There isn’t anything too significant on the board once again for today, with little expiries of note for the remainder of the week as well.As a reminder, it is a shortened week in Europe as well as for Australia and New Zealand with the Easter break coming into effect on Friday. So, that also partly explains the lack of interest on the day itself.For more information on how to use this data, you may refer to this post here.

European indices have also turned around earlier losses to be up around 0.1% to 0.2%, though the DAX is still down 0.3% currently. But US futures are keeping higher with S&P 500 futures and Dow futures both up 0.6%, while Nasdaq futures are up 0.8%.As much as there is optimism, it may prove to be fleeting with earnings releases coming into focus.It’s all about what the companies will say about the state of the economy and how badly inflation is biting at the business outlook. As Adam pointed out here, sentiment may very well hinge on what JP Morgan CEO, Jamie Dimon, says later today.Here’s the full lineup of the earnings calendar through to the end of the month.

Headlines:Japan PM Kishida: FX stability is importantUSD/JPY keeps above 125.00 despite more verbal interventionUS March NFIB small business optimism index 93.2 vs 95.7 priorUK March jobless claims change -46.9k vs -48.1k priorGermany April ZEW survey current conditions -30.8 vs -35.0 expectedGermany March wholesale price index +6.9% vs +1.7% m/m priorGermany March final CPI +7.3% vs +7.3% y/y prelimMarkets:AUD leads, EUR lags on the dayEuropean equities lower; S&P 500 futures up 0.1%US 10-year yields down 0.7 bps to 2.775%Gold flat at $1,955.40WTI up 3.9% to $97.95Bitcoin up 1.3% to $40,335The session was quiet in terms of major headlines but there was some decent movement throughout.The bond market continues to be under the spotlight and the selling continued early on but has cooled considerably ahead of the US CPI data release later. 10-year Treasury yields were up to 2.84% but have come down to near 2.77% currently but all eyes will be on what the inflation numbers have to offer in just over half an hour.The dollar was mostly steady as it kept a slight advance against the euro, pound and yen. EUR/USD eased from 1.0880 to 1.0855 while GBP/USD was brought down from 1.3030 to test the 1.3000 handle again. Meanwhile, USD/JPY kept higher around 125.50-70 for the most part despite some jawboning by Japanese officials.In the equities space, European stocks are staying more sluggish following the drop in Wall Street yesterday. But losses have been trimmed as US futures have also pushed a little higher, with S&P 500 futures covering a 0.6% drop early on to be up by 0.1% now.Could this all be pointing to some positioning play for a softer US CPI report? Perhaps. But we’ll see come 1230 GMT.

The February reading was +7.9% y/y and consumer inflation in the US is estimated to jump up further in March to +8.4% y/y. The monthly reading is expected to reflect a rise of 1.2% after a 0.8% monthly increase in February.
In short, inflation is expected to run hot as it has been in the past few months. The Russia-Ukraine war has just exacerbated conditions globally and the recent lockdown in Shanghai certainly won’t help with the situation.
But what is the market anticipation coming into today and where is the action going to be?
Let’s first take a look at the forecast distribution for today’s estimate:

As you can see, there’s quite a skew towards being above the expected +8.4% y/y estimate. While this is just a forecast, it does point to some expectation that there are certain quarters of the market expecting higher inflation numbers. As such, I’d wager anything above +8.7% y/y or closer towards +9.0% y/y to produce a stronger „beat“.
Meanwhile, a reading closer towards +8.0% y/y is likely to help soothe the market a little that at least the inflation ‚blow up‘ isn’t as uncontrollable as feared.
As for the reaction, the bond market is the first place to look at. The recent selling is continuing as yields are running higher and a beat on estimates will surely spur further momentum in that. In turn, the dollar is likely to catch a further tailwind – especially against the yen.
On the flip side, the opposite reaction to the above will apply; all else being equal that is.

Prior 95.7US small business sentiment declines as inflation worries continue to mount. The share of business owners reporting that inflation was their single most important problem was the largest since 1981, some 31% – up 5 points from February. The share of owners raising average selling prices also increased 4 points to 72% in March – a record high. NFIB noted that price increases were seen across all industries.