ANDIKA BULLETin 4 APR 2024

ASX200 Futs are up 26pts

Another mixed bag of data overnight - something for everyone - ADP showed better job gains than expected (but wage growth soared, re-igniting inflation fears). S&P Global's Services PMI dropped (but prices paid soared) and ISM Services PMI also dropped (notably more than expected) while Manufacturing rose yesterday.

But the market only had eyes for one thing - the plunge in prices paid in ISM Services (which literally diverged from all other recent 'prices paid' surveys and the respondents' comments)...

For context, that is the biggest two-month plunge in ISM Services Prices Paid since Dec 2008...

That one datapoint was all the algos needed and stocks rallied, the dollar and bond yields dropped, gold spiked to new highs, bitcoin jumped higher, and even rate-cut hopes rose immediately (but still less than 3 total rate-cuts priced in for 2024)...

As the US dollar dived back to one-week lows that helped send gold to its fifth record closing high in a row, within pennies of USD$2,320 (spot)...

Finally, as gold pushes to record-er and record-er highs (in USD terms), Real yields refuse to play along...

Whatever gold is worrying about it is big.

Happy Thursday!

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