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Opec+ Oil Shock As The Cartel Cuts 1.6Mln Barrels Of Supply, Oil Surges 8%

Asia equity markets start the holiday-shortened trading week with modest gains as investors digest a surprise move by Opec+, with the announcement of a supply cut issued Sunday afternoon. The cartel has committed to slash supply by 1.6mln barrels leading to an 8% surge in crude oil prices ticking above $80 per barrel. Global markets ended the month and quarter in a positive tone, the benchmark SP500 notched up a 7% gain while the Nasdaq closed up 17% as markets continue to reprice Fed monetary policy calculating the potential for rate cuts into the back end of this year. In China, the March Caixin manufacturing PMI index edged back to 50 from 51.6 in February, and the hotly anticipated China reopening impulse continues to prove lackluster with the Chinese economy showing modest improvements with the exit from Covid restrictions.

This week is a holiday shortened as such the data docket in the UK is scant, investors will keep an eye on Friday’s US  Non Farm Payrolls report, and today’s data dockets provide further manufacturing updates.  The March PMI manufacturing data for the UK and the Eurozone are second looks, although some of the detail for individual countries in the Eurozone are published for the first time. The ‘flash’ releases showed UK activity dropping to a two-month low however, the tone was more positive as supply chain concerns eased significantly. In the Eurozone, the headline number declined to a four-month low printing just below the pivotal expansion/contraction level of 50 but nudging closer to this number confirms continued incremental upside from depressed levels.

Today’s US ISM manufacturing report will likely remain sub 50 as with other major economies factory production remains short of the output seen in the services sector. Overnight Reserve Bank of Australia will deliver its latest perspective on economic conditions, the bank is expected to keep interest rate policy on hold following a 350bps hiking cycle since last May
 

CFTC Data

• IMM net spec USD short increased in Mar 22-28 period
• EUR$ +0.7% in period, specs absent as long rose 183 contracts to 145,025
• $JPY -1.15% in period, yen spec +12,370 contracts now short 53,975
• Lower UST yields amid bank crisis sends UST yield lwr, JP-US rates converge
• GBP$ +1.05% in period, specs -3,586 contracts short grows to -24,084
• AUD$ +0.55%, specs +3,106 contracts now short 35,353; CAD specs -4 contracts
• BTC -2.99% in period, specs +345 contracts as BTC eyes trend highs (Source RTRS)
   

Overnight News of Note

• Oil Rockets 8% After OPEC+ Jolts Market With Surprise Output Cut
• Fed's Waller: Inflation Can Drop Without Much Harm To Job Market
• ECB's De Guindos: CPI Likely To Decline In This Year, Core To Stay Firm
• China's March Factory Activity Growth Falters On Weaker Demand
• PBoC Calls For Stronger Defences Against Financial Crisis
• China Presses Japan To Change Course On Chip Export Curbs
• Japan's Business Mood Sours To 2-Year Low As Global Slowdown Bites
• Australia’s Government Strengthens Grip With By-Election Win
• NZIER: RBNZ Shadow Board Recommends 25 Bps Hike
• Dollar Gains As Inflation Worries Resurface After OPEC+ Surprise
• OPEC+ Makes Surprise 1.16 Mbpd Cut In New Inflation Risk
• Japan Breaks With US Allies, Buys Russian Oil Above Cap
• Oil Surge Sends US Equity Futures Down And Yields Up
• McDonald’s Temporarily Shuts US Offices As Chain Prepares Layoffs
• Tesla Deliveries Rise To Record After Slashing Prices On EVs
• UBS To Slash Staff Up To 30%; Prosecutors Look At CS Deal

(Sourced from Bloomberg, Reuters and other reliable financial news outlets)
 

Technical & Trade Views

SP500 Bias: Intraday Bullish Above Bearish Below 4080

• Primary support is 4040
• Primary objective is 4135
• Below 4040 opens 3985
• 20 Day VWAP bullish, 5 Day VWAP bullish

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EURUSD Bias: Intraday Bullish Above Bearish below 1.0830

• Primary support  is 1.07
• Primary objective is 1.1128
• Below 1.0700 opens 1.0660
• 20 Day VWAP bullish, 5 Day VWAP bearish

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GBPUSD Bias: Intraday Bullish Above Bearish below 1.2280

• Primary support  is 1.2200
• Primary objective 1.2411
• Below 1.2170 opens 1.2100
• 20 Day VWAP bullish, 5 Day VWAP bullish

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USDJPY Bias: Intraday Bullish above Bearish Below 133.00

• Primary resistance  is 135.15
• Primary objective is 129.15
• Above 136 opens 137.90
• 20 Day VWAP bearish, 5 Day VWAP bearish

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AUDUSD Bias: Intraday Bullish Above Bearish below .6696 

• Primary resistance is .6740
• Primary objective is .6950
• Below .6560 opens .6450
• 20 Day VWAP bearish, 5 Day VWAP bullish

(Click on image to enlarge)

BTCUSD Intraday Bias: Bullish Above Bearish below 26500

• Primary support 23000
• Primary objective is 30000
• Below 23000 opens 22400
• 20 Day VWAP bullish, 5 Day VWAP bearish

(Click on image to enlarge)

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