Supply chain woes rock the boat

The collision of the Singapore-registered container ship, the Dali, with a bridge in Baltimore, has caused significant disruptions and raised concerns about its impact on supply chains and goods inflation. The incident resulted in the closure of the Port of Baltimore, which is a major hub for U.S. automobile and farm equipment imports. Additionally, a major highway was closed, and container traffic has been diverted to other ports across the U.S.

This incident adds to existing trade disruptions in the Red Sea and the effects of droughts in the Panama Canal. While the starting point of supply chains is relatively robust, the situation poses a key risk to monitor. The extent to which it remains localized will be crucial in determining its broader impact on supply chains and goods inflation.

USD/JPY lurched higher after the Tokyo and CNY Fix and is on a collision course to test 152.00, which is a big round number and a level of importance in many minds. However, you would be hard-pressed to find any trader who thinks the BoJ will intervene.

Stocks and oil markets are struggling amid consumer pessimism.

The latest release of the U.S. Consumer Confidence Index by The Conference Board indicates a slight decrease in March, with the index falling to 104.7, notably lower than the anticipated 106.7. This decline reflects a shift towards pessimism among U.S. consumers regarding future economic conditions.

Dana M. Peterson, the chief economist at The Conference Board, highlighted that consumers' apprehensions primarily revolved around the persistently high price levels. In March, there was a notable increase in concerns regarding food and gas prices, as revealed in the write-in responses.

Peterson further noted that confidence levels took a hit among consumers under the age of 55 and those in the annual income range of $50,000 to $99,999. This suggests a broader unease among these demographic groups about their economic outlook and financial situations.