Daily Flows & Commentary BY THE CURVE TEAM –

Daily Flow & Insights – U.S. Opens the Oil Flood Gates

Friday, 1st of April, 2022

Daily Flows

  • Flows were a little subdued again yesterday as ADI’s and investors take a bit of a breather from recent activity.
  • Bonds rallied significantly through the session, seeing a 10-15bp fall across fixed bond yields.
  • NCD activity was healthy, with notable investor interest into foreign branch banks who continue to offer +25 for 3-month funds.

Oil Volatility Continues

  • WTI oil prices fell by 5.8% overnight, adding to the recent volatility in oil and broader commodity markets.
  • The fall is primarily driven by an announcement from the United States that they would release up to 180 million barrels of oil from their reserves over the next 6 months in an attempt to combat weakening supply and surging prices since the outbreak of the Russia-Ukraine war.
  • Russia have also pushed ahead with their demand that all Russian gas is purchased in Roubles. With much of Europe still reliant on Russian gas, this further puts the pinch on already-struggling energy markets.

U.S. Jobs Report

  • The U.S. Jobs Report is released tonight, which will be a key consideration in the Fed’s decision on whether to hike rates by 50bps at their next meeting in May.
  • The unemployment rate is expected to reach a lowly 3.7% in a historically tight labour market.

Lawrence Vosper

Associate - Money Markets