Can oil prices keep rising?

As OPEC+ members cut oil output drastically, oil traders are not convinced that the current ascending trend of oil prices will keep up its momentum. Oil futures suggest that the prices could peak after the shocking rise in price yesterday.

The futures prices in December appear to be trading below the current prices. For some, it can be seen as a bullish sign for oil prices and stocks, though based on a trading pattern, backwardation. This situation motivates producers to control their supply growth to ensure market demand and supply balance and encourage oil traders to buy longer-dated oil futures.

It will be an interesting dynamic to unfold.

Is it time for Treasuries to take a break?

March has been an exciting month, nothing short of a positive return given the regional bank crisis that push people to haven assets. Now traders are expecting this uptrend to cool down. Given that the 2-year yield had retreated by 76 basis points in March, it is unlikely to repeat such enormous large decline trend for the rest of the year.

After all, if each month persists in such a fashion, it would mean that the yield will hit a negative 2.8%, which is highly unlikely. If that is the case, we might start to see some pressure on long-duration technology stocks.

What’s on the menu today?

At 10 pm, we will have the data for Factory orders for MoM comparison. We will likely see a continued decline but at a softer level, from -1.6% to -0.5%.

Then comes an important piece of job data. The JOLTs Job opening for Feb should drop from 10.82M to 10.40M. This should encourage the Fed to be less aggressive in rate hikes when they see a softening labour market.

Fed Governor Cook is expected to speak at 1.30 am, and concurrently, FOMC member Rosengren will also speak.

It is Tuesday, 4 April at 9 am in Singapore and 9 pm in New York. We hope everyone has a profitable April trading month too!