It’s been a rather boring week so far, there isn't much in the way of news, especially as a good number of financial markets will be taking a break on Good Friday for the long Easter weekend.

Yesterday, Wall Street continued to consolidate. After spending most of the day in the green, the S&P500 was down 0.28%. The Nasdaq100 (-0.36%) and Dow Jones (-0.08%) followed suit. In the game of hindsight, the latest batch of macroeconomic statistics did not thwart financiers' plans for the timing of future central bank rate cuts, but they probably got vertigo from the records peaks reached in the past few days. They are now taking a cautious stance ahead of PCE inflation. In Europe, the stock market session got off to a fairly poor start, but the return of buyers in the late morning helped to erase losses and even finish with modest gains, but gains nonetheless. 

Today, investors will be dissecting commentary from Fed Board Governor Christopher Waller, who is due to speak at the Economic Club of New York. He is part of the hawks, so investors expect him to advocate for keeping rates high for longer. In any case, traders still see an at least 70% chance the Fed will start cutting rates in June, according to the CME FedWatch tool.

The PCE price index, the Fed's preferred inflation gauge, is due on Friday, when U.S. markets will be closed. A Reuters poll of economists calls for a 0.4% rise in February and 2.5% on an annual basis. Core inflation, which excludes volatile food and energy components, should gain 0.3% on a monthly basis and 2.8% on an annual basis. Any figure above this may cause turmoil on Wall Street.

Meanwhile, cocoa prices are breaking records on an almost daily basis. Yesterday, the price briefly broke the symbolic USD 10,000 per tonne barrier. The price surge has been spectacular since January 1 (+136%), and even more so over the past two years, since cocoa prices have long fluctuated between 2,000 and 2,500 dollars. We're talking about a price multiplication of the order of 4 to 5 times in just two years, a situation resulting from a serious supply problem in West Africa, where three quarters of the world's production is concentrated, while at the same time the world's appetite for chocolate continues unabated.

On the supply side, the industry is suffering from declining yields, mainly due to ageing trees, a lack of investment in new crops, and the proliferation of disease on pods as a result of poor weather conditions. On the demand side, it has doubled in 30 years, and the buying frenzy is unlikely to put a stop to this fundamental trend. Why is this so? Because the average American eats 9kg of chocolate per year, while the average Indian consumes only 1kg and the average Chinese only 200g. In this respect, it's hard to imagine that the rise of a middle class in Asian countries won't push these figures higher.

As a result, the cocoa market, which has already been in deficit for the past two years, is set to experience a historic deficit this year. The gap between supply and demand could be in the region of 400,000 tonnes. Against this backdrop of scarcity, the financial machinery of futures contracts is running amok. We are witnessing the same phenomena observed during the natural gas crisis in Europe: margin calls that are not honored and short positions that are unwound at full price, fueling the price boom again and again. Will chocolate become a luxury food in the next few years? Maybe, maybe not, but in any case, a tonne of cocoa is now worth more than a tonne of copper.

In the Asia-Pacific region, trends are positive this morning. The Nikkei 225 gained 0.90% in Japan, supported by the weakness of the yen, which fell to a 34-year low against the dollar. In Australia, the ASX 200 closed up 0.5%. The latest inflation data reinforce the scenario of a rate cut by the Reserve Bank of Australia in the coming months. In China, the Hang Seng shed 1.3%. South Korea is also losing ground, with the Kospi down 0.17%. The SENSEX continues to perform well, gaining 0.76%. European leading indicators are mostly bullish, while Wall Street opened firmly in the green.

Today's economic highlights:

Christopher Waller’s speech and weekly US oil inventories are today’s main events. The full agenda is here

The dollar rises to EUR 0.9249 and GBP 0.7928. The ounce of gold fails to break the USD 2200 line. Oil stabilizes, with North Sea Brent at USD 85.25 a barrel and US light crude WTI at USD 81.10. The yield on 10-year US debt reaches 4.236%. Bitcoin is trading at around USD 70300.

In corporate news:

  • Trump Media & Technology, the media company owned by former US President Donald Trump, is up 11% in pre-market trading, a day after its dazzling debut on the Nasdaq.
  • Merck & Co climbs 4.5% in premarket trading, as the FDA, the US health authority, approves its Winrevair treatment for adults suffering from pulmonary arterial hypertension, a condition that affects around 40,000 people in the country.
  • Amazon on Wednesday saw its request to suspend its obligation to make an advertising register available to the public rejected by the European Court of Justice, the bloc's highest court declaring that the interests of the EU should take precedence over the material interests of the American group.
  • Robinhood Markets jumped 7.3% in pre-market trading after the online trading platform launched a new credit card on Tuesday evening, with the aim of expanding its presence in the personal finance market and increasing its subscriptions.
  • Gamestop plunged more than 18% in premarket trading after the group reported fourth-quarter sales well below those for the same period a year ago. The video game distributor also announced that it had cut jobs, without specifying the number, in order to control costs.
  • Moderna announced on Wednesday that it had reached an agreement with Blackstone's life sciences investment platform for $750 million in funding to develop its messenger RNA-based flu vaccines.
  • Citigroup laid off at least 10 people in its Asia-Pacific equity research department this week, two sources close to the matter reported, as the bank enters the final phase of a major restructuring plan.
  • Phillips 66 - The oil refining group is considering selling its 25% stake in the Rockies Express Pipeline for more than $1 billion, including debt, sources familiar with the matter reported Tuesday evening.

Analyst recommendations:

  • Fedex Corporation: BNP Paribas Exane downgrades to underperform from neutral with a target price of USD 250.
  • Visa, Inc.: Redburn Atlantic downgrades to neutral from buy with a price target raised from USD 280 to USD 307.
  • Wells Fargo & Company: Keefe Bruyette & Woods downgrades to market perform from outperform with a price target raised from USD 56 to USD 62.
  • Doordash, Inc.: JMP Securities maintains its market outperform recommendation and raises the target price from USD 130 to USD 160.
  • Uber Technologies, Inc.: MoffettNathanson LLC maintains its buy recommendation and raises the target price from USD 76 to USD 92.
  • Howden Joinery Group Plc: Stifel upgrades to buy from hold with a price target raised from GBX 700 to GBX 975.
  • Hsbc Holdings Plc: Barclays downgrades to equalweight from overweight with a price target reduced from GBP 8 to GBP 7.40.
  • Auto Trader Group Plc: Societe Generale maintains its hold recommendation with a price target raised from GBX 630 to GBX 795.
  • Grafton Group Plc: Stifel maintains its buy recommendation and raises the target price from GBX 940 to GBX 1150.
  • Wise Plc: Citigroup maintains its sell recommendation with a price target raised from GBP 5.90 to GBP 7.40.
  • Adobe Inc.: President Capital Management Corp maintains its buy recommendation and reduces the target price from USD 670 to USD 613.
  • Cisco Systems, Inc.: DZ Bank AG Research maintains its hold recommendation with a price target raised from 48 to USD 50.
  •, Inc.: Fubon Securities maintains its buy recommendation and raises the target price from USD 347 to USD 358.
  • Spotify Technology S.a.: HSBC initiates a Buy recommendation with a target price of USD 310.