Rise and shine everyone. Happy Friday!

A quick note today since most markets are closed.

The US PCE Inflation numbers are being released today. Consensus estimates a higher inflation print following the hotter US CPI numbers.

The question is… do they really matter anymore, now that the Fed has all but confirmed that they are happy to shrug off higher inflation and continue to with rate cuts for the year, anyway.

The bigger news perhaps, is the moderated discussion with Chair Powell at 11:30 am ET today. This comes after the release of the inflation numbers and a hotter print could lead him to discuss a change in views for rate cuts. Although he’s technically not allowed to confirm a change until the next dot plot, the market will be looking for clues for a shift in thinking.

As we saw Governor Waller emphasize that “There’s Still No Rush” in his speech at the Economic Club of New York on Wednesday. But the market didn’t seem to care about his hawkish comments.

Q1 came to a close with stocks holding near new all-time highs. Final March University of Michigan consumer sentiment data was the strongest in nearly 3-years. Final Q4 GDP was revised higher to 3.4% while initial jobless remained indicative of a solid US labor market. The energy complex rose helped by rising crude prices. The US reportedly purchased 2.8M barrels of oil for SPR.

Quote of the Day

“I continue to believe that further progress will make it appropriate for the FOMC to begin reducing the target range for the federal funds rate this year. But until that progress materializes, I am not ready to take that step. Fortunately, the strength of the U.S. economy and resilience of the labor market mean the risk of waiting a little longer to ease policy is small and significantly lower than acting too soon and possibly squandering our progress on inflation.” - Christopher Waller - In no rush to cut rates.

Chart of the Day

The Energy Sector’s relative performance to the SPX has lagged the price of Crude Oil. There’s still catching up to do and we may see earnings revisions this year that will help the performance of equities.

Other Stories

• Japan's upper house of parliament passed a ¥112.6T national budget for the fiscal year starting April 1st [Note: first budget amount decline y/y in 12 years]

• Portugal Mar Preliminary CPI M/M: 2.0% v 0.0% prior; Y/Y: 2.3% v 2.1% prior

• Italy Feb PPI M/M: -1.5% v -2.5% prior; Y/Y: -14.2% v -14.0% prior

• Japan PM Kishida: Appropriate for BOJ to maintain easy monetary condition; Govt and BOJ to continue close cooperation on economic policy

• China Commerce Minister Wang: To visit Europe in April to discuss EU investigation of China-made-EVs

• China said to initiate WTO dispute regarding US tax credits for EV and renewable energy

• US and UK are probing $20B in cryptocurrency transfers sent to Russian exchange

• AAPL reportedly getting ready to release new iPad lineup in May; Newest iPad release following an 18-month break

Calendars

(news taken from Reuters, FT, Bloomberg; Calendar from Trading Economics)