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.

The reserves would only be enough to last until late summer or early fall and German households would have to give up on heating privileges in the event of a gas supply emergency.Well, with wholesale prices also soaring today, I doubt lawmakers will have much appetite to change their stance on an embargo on Russian oil and gas for now. The EU will continue to try to apply pressure on that front but Germany will likely stand its ground and the above situation also speaks for itself.

Prior -21.4
Economic sentiment -41.0 vs -48.0 expected
Prior -39.3

The headline reading is the lowest since May last year with ZEW noting that the current economic situation reflects pessimism and experts assume that conditions will continue to deteriorate. But there was a decline in inflation expectations, giving some cause for ohpe. That said, the prospect of stagflation remains over the next six months.

The ongoing worries surrounding global growth isn’t really helping the mood in oil at the moment and we’re taking quite a shave off the top after the spike towards $130 amid the Russian invasion of Ukraine in early March.The uneasy situation surrounding Shanghai isn’t helping with the outlook as China remains a major uncertainty at this stage. The technicals point to some support around $95 and the 15 March low at $93.56 but a drop below that is where things could get uglier for oil, despite a 4% decline to start the new week already.There won’t be much support towards $90 next before the 100-day moving average (red line) @ $88.51 currently comes into play.I outlined my thoughts on the oil market in this post last week. I still stand by the more bullish structural view with dip buys around $80 to $85 being where the value is at, barring major demand destruction.

Not much has changed since my earlier post at the start of the day here.
The bond market remains in charge of trading sentiment at the moment and the yen is being punished for it in European morning trade. USD/JPY is up 110 pips on the day now to 125.40 as buyers seek a firm breakout above the 125.00 level.
Here’s a look at Treasury yields:

2-year Treasury yields +6.4 bps to 2.584%
5-year Treasury yields +6.5 bps to 2.822%
10-year Treasury yields +5.6 bps to 2.771%
30-year Treasury yields +2.8 bps to 2.774%

And it doesn’t just stop there. It’s a global push as we are seeing 10-year German bund yields are at its highest since 2018 while 10-year French bond yields are at their highest since 2015. Meanwhile, 10-year JGB yield are also approaching the BOJ’s implicit yield cap at 0.25% once again.