TRADERS: Five Things You Need to Know to Start Your Day

TRADERS: Five Things You Need to Know to Start Your Day

U.S. considers more sanctions, markets roiled over Fed balance sheet and Musk’s impact on Twitter analyzed.

More sanctions

NATO foreign ministers are meeting as the U.S. and allies are coordinating on a new round of sanctions to punish Russia for the alleged murders of civilians by its troops in Ukraine. EU Council President Charles Michel said measures to restrict Russian oil and gas will have to be discussed “sooner or later.’’  Also on the table are EU sanctions on Oleg Deripaska, an aluminum tycoon, along with several other key business figures. The city of Mariupol remains under siege and the humanitarian situation has deteriorated, with most of the 160,000 remaining residents lacking access to electricity or food, the U.K. Minister of Defense warned.

Fed fallout

The global bond meltdown intensified after Federal Reserve Governor Lael Brainard said the central bank will start balance sheet reduction as soon as next month. Today’s Fed minutes could offer some details. Money-market traders bet on the sharpest Fed tightening in almost three decades, with pricing suggesting 250 basis points of hikes in 2022. Funds say stock and credit markets are too calm ahead of faster-than-expected tightening.

Tweeting Musk

Elon Musk is already driving change at Twitter, with the social media company kicking off internal testing on an edit function that the Tesla chief has polled users on. Musk’s appointment to the board and recent chats with CEO Parag Agrawal suggest Musk intends to take a more active role in the platform, which could bring about more action. Musk could help make Twitter more popular and influential but a key question is whether he will promote his other companies or disclose the platform’s non-public financial information.

Stocks slump

Most European equity indexes dropped over 1% as of 5:45 a.m. New York with autos and travel leading broad-based losses in the Stoxx 600. S&P 500 futures fell as much as 0.5%. Bonds extended losses. Ten-year Treasury yields rose 7 basis points near 2.61%, underperforming German and U.K. peers. The dollar’s strength faded with the pound and New Zealand dollar the strongest G-10 performers. Crude futures rose, with WTI adding more than 1%. Base metals traded poorly. Gains in spot gold stalled near $1,930/oz.

Coming up…

The FOMC’s March meeting minutes, due at 2 p.m. Washington time, should grab the market’s attention today. That said, the bar for a hawkish surprise has arguably been raised after Tuesday’s commentary from Fed’s Daly, Brainard and George. At 9:30 a.m. we are due to hear from Fed’s Patrick Harker, a 2022 voter on the FOMC, who is scheduled to speak on the economic outlook. U.S. economic data is limited to the MBA mortgage applications release at 7 a.m. Canada’s Ivey PMI will be released at 10 a.m. and the DOE oil inventory numbers are due at 10:30 a.m.

What we’ve been reading

Here’s what caught our eye over the past 24 hours.