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The Economic Calendar:
MONDAY: Chicago PMI (8:45a CT), Dallas Fed Manufacturing Index (9:30a CT), Quarterly Grain Stocks (11:00a CT)
TUESDAY: Redbook (7:55a CT), S&P Global Manufacturing PMI (8:45a CT), Construction Spending (9:00a CT), ISM Manufacturing Index (9:00a CT), JOLTs (9:00a CT), Dallas Fed Services Index (9:30a CT)
WEDNESDAY: MBA Mortgage Applications (6:00a CT), ADP Employment Change (7:15a CT), Factory Orders (9:00a CT), Total Vehicle Sales (9:00a CT), EIA Petroleum Status Report (9:30a CT), Fed Kugler Speech (3:30p CT)
THURSDAY: Challenger Job Cuts (6:30a CT), Balance of Trade (7:30a CT), Import/Export Prices (7:30a CT), Jobless Claims (7:30a CT), S&P Global Composite PMI Final (8:45a CT), ISM Services Index (9:00a CT), EIA Natural Gas Report (9:30a CT), Fed Jefferson Speech (11:30a CT), Fed Cook Speech (1:30a CT), Fed Balance Sheet (3:30a CT)
FRIDAY: March Unemployment Report (7:30a CT), Fed Powell Speech (10:25a CT), Fed Barr Speech (11:00a CT), Fed Waller Speech (11:45a CT), Baker Hughes Rig Count (12:00p CT)
Key Events:
Traders are now squarely focused on April 2nd, a date dubbed “Liberation Day” by President Trump.
The President is expected to implement reciprocal tariffs and a previously announced 25% tariff on automobile imports. The ongoing trade war turmoil has roiled markets, and further turbulence is anticipated depending on the specifics of the April 2nd announcements.
Data due on Friday morning. The consensus is that 128k nonfarm payrolls will be added to the US economy in March.
So far, the U.S. labor market remains resilient. Initial jobless claims data indicate a stable trend, with no signs of an imminent increase in unemployment.
However, due to DOGE’s efficiency initiatives, uncertainty remains regarding the potential impact of layoffs among former federal employees.
As the first quarter of 2025 concludes, market participants are closely monitoring potential equity rebalancing flows on Monday, with estimates varying widely from $40 billion to nearly $200 billion.
JPMorgan estimates $135 billion in equity purchases, while another analyst predicts a potential $195 billion rebalancing event, with speculation surrounding its timing. Pension funds alone are estimated to contribute $40 billion in equity buys, a historically high figure. UBS analysts reportedly project $100 billion in rebalancing flows for March 31st, the largest since March 2020, which could significantly boost market liquidity.
The April 4th release of the March payroll numbers is likely a critical market catalyst, potentially setting the tone for April. According to analysts, a soft landing scenario, characterized by payroll growth of 100,000 to 200,000, would likely support the recent S&P 500 low of 5,500. Conversely, a hard landing scenario, with payroll growth below 100,000, could lead to new S&P 500 lows in April, dragging down global stocks and prompting significant tax cuts from the Trump administration.
Concerns are also mounting regarding the health of U.S. banks. The recent surge in the high-yield credit default swap index to 400 basis points, coupled with a 22% decline in a private equity basket (consisting of Blackstone, KKR, Carlyle, Apollo, and major bank stocks) over the past two months, is raising red flags. Analysts suggest that the private equity sector, commercial real estate, small-cap stocks, and housing may require aggressive Federal Reserve rate cuts to stabilize.
Hedge Fund legend Paul Tudor Jones is well-known for his emphasis on risk management and trend following, and the 200-day moving average is a key component of his approach. He says, “My metric for everything I look at is the 200-day moving average of closing prices.”
Source: TradingView
Agricultural markets are bracing for significant price swings as the U.S. Department of Agriculture (USDA) prepares to release its highly anticipated Prospective Plantings and Quarterly Grain Stocks reports on March 31, 2025. Based on surveys of U.S. farm operators, these reports will provide crucial insights into planting intentions for the 2025 growing season.
The week leading up to the reports saw mixed trading in corn and soybean futures, with prices fluctuating amid tariff concerns and acreage expectations.
Drawing from a survey of nearly 72,000 farmers, the Prospective Plantings report is expected to reveal a shift in acreage favoring corn, driven by relative price strength and profitability. Analysts anticipate corn plantings to reach 94.0-94.5 million acres, a 4-5% increase from 2024. This projection is supported by December 2025 corn futures trading around $4.51 and a soybean-to-corn ratio below the 2.5 benchmark.
Conversely, soybean planting intentions are projected to decline by 2-3%, to 83.5-84.0 million acres, reflecting weaker soybean prices and competition from Brazil. A surprise deviation from these estimates—higher corn acreage or lower soybean acreage—could trigger significant price movements.
The Quarterly Grain Stocks report will provide a snapshot of corn and soybean inventories as of March 1, 2025, offering insights into demand from December 2024 to February 2025. Corn stocks are expected to be around 8.2-8.35 billion bushels, while soybean stocks are projected at 1.85-1.89 billion bushels.
Corn disappearance is anticipated to be robust, driven by strong ethanol demand and feed use, though high prices may have tempered some feed demand. Soybean disappearance is expected to be lower than last year, reflecting a decline in exports and slower Chinese demand, despite strong domestic crush activity.
According to Bloomberg sources, the U.S. may impose copper import tariffs within weeks, well ahead of the expected deadline. President Trump has suggested up to 25% tariffs to boost domestic production.
As a result, copper prices surged in New York, creating a price gap between London and the US, and triggered a global rush to ship metal to the US before tariffs hit.
Traders remain divided on the timing of the Federal Reserve’s first rate cut, with opinions split between the first and second half of 2025. This divergence is evident in contrasting signals from various market indicators.
Asset managers are demonstrating a strong conviction in near-term rate cuts, holding a record net long position in 3-month SOFR futures, with an unprecedented inflow of 237,000 contracts last week. However, the options market paints a different picture, with heavy put buying at the June 2025 95.75 strike price suggesting some investors are hedging against rates remaining unchanged through mid-year.
The CME FedWatch Tool, which analyzes 30-Day Fed Funds futures prices, indicates a significant probability of a rate cut by the June FOMC meeting. Specifically, the tool suggests a market pricing of approximately 4.15% for the June meeting, which is 18 basis points below the current effective federal funds rate of 4.33%. This translates to a 72% probability of a full 25 basis point rate cut.
Given this market positioning, some analysts are advocating for a contrarian approach, suggesting taking profits when the implied probability of a rate cut falls within the 25-33% range, or a 3:1 probability against a cut.
Federal Reserve Governor Susan Collins has cautioned that tariffs will inevitably increase inflation, suggesting that interest rates may need to remain at current levels for an extended period.
Meanwhile, the European Central Bank (ECB) is widely expected to cut its deposit rate by 25 basis points to 2.5% at its meeting. Markets are assigning a roughly 97% probability to this move. Despite recent data showing a slight uptick in headline inflation and persistent core inflation, the ECB’s Governing Council remains confident that inflation will return to its target over the course of the year.
Having reached our previous long-term target of $3,000 per ounce, Gold prices are poised for further gains, potentially hitting a revised forecast of $3,500 per ounce.
We are seeking to leverage this bullish outlook utilizing options strategies to enhance returns while managing risk (call spreads).
The potential for increased demand stems from several key sources. China’s insurance industry, which is permitted to allocate 1% of its assets to gold, could significantly impact the market, representing approximately 6% of annual gold demand. Central banks, currently holding around 10% of their reserves in gold, could also increase their allocations to over 30% to optimize portfolio efficiency.
Furthermore, retail investors have been actively increasing their exposure to gold, with assets under management in physically backed ETFs rising by 4% year-to-date across the Americas, Europe, and Asia. The ongoing uncertainty surrounding the Trump administration’s trade policies could further weaken the U.S. dollar, providing additional support for gold prices in the near term.
A broader rebalancing of America’s twin deficits (fiscal and current account) is also viewed as a bullish gold catalyst, potentially driving higher prices.
Source: TradingView
A compelling trading opportunity has emerged in the agricultural commodities sector, centered on exploiting the current price divergence between cotton and coffee. The core thesis hinges on the principle that supply-driven price distortions, while initially dramatic, are inherently unsustainable and will ultimately correct through demand adjustments and supply normalization.
Specifically, coffee prices have experienced a sharp spike due to severe supply shortages caused by adverse harvests. Conversely, cotton prices have slumped amid a supply glut stemming from unusually bountiful harvests.
This imbalance has created a significant price differential, which some traders believe presents a high-probability, high-return opportunity. The expectation is that as demand for coffee moderates and cotton supply normalizes, the relative prices of these commodities will converge. Analysts suggest this trade could yield 100% or more returns within months.
Some traders are structuring utilizing futures contracts on the Intercontinental Exchange (ICE), focusing on July or September/October contract months. This allows for greater leverage and precision in managing the trade. Use volatility position sizing to make the futures contracts beta neutral.
Traders are using options to protect BTC positions at the 80000 strike.
Bitcoin has experienced a volatile Q1 2025, with price action reflecting a mix of bullish momentum and consolidation. After hitting all-time highs above $108,000 in late 2024, BTC has seen a pullback in recent weeks, trading around $85,000–$90,000 as of late March. The medium-term outlook (spanning weeks to a few months) shows Bitcoin in a corrective phase within a broader uptrend, with key levels dictating the next move.
Bitcoin Chart 03-30-2025
