Morning Brew 05 August 2021

Morning Brew 1 minute to read

Erik Schafhauser

Senior Relationship Manager

Summary: Looking for Narrative

Good Morning

An interesting day in FX yesterday where the USD fist gave up ground – trading as low as 91.80 then fairly hawkish comments by Richard Calida caused a reversal. Gold and Silber tested the upper end of their trading range at 1831 and 26. EURUSD was within reach of the 1.1900. US 10 Year yields fell to below 1.15%before rising to 1.2% again.

Federal Reserve Vice Chair Richard Clarida stated "Commencing policy normalization in 2023 would, under these conditions, be entirely consistent with our new flexible average inflation targeting framework,"

Equities remained fairly strong despite Clarinda’s remarks and closed only slightly off the previous day. GM and ford weighed on blue chips. Both car makers declined, GM 8.9% and Ford by 5%. The Dow lost 0.92%, the S&P 500 lost 0.46%, and the Nasdaq gained 0.13%. Dax keeps trying to breach the 15700 but is failing so far.

Robin Hoods Options started trading and the stock temporarily rose to 85 after the IPO at 38.

The US reports 100k new corona infections, the highest number in 6 Months

Reuters released a poll of FX strategists, 63% state they are not confident that the USD will weaken in the next 12 months, and 57% expect volatility to increase

What to watch out for today? The Bank of England at 13:00 CET, no change in rates is expected but any comments on the asset purchase program will be of significance. In the US the initial Jobless claims at 14:30 CET give a little indication on the nonfarm payroll. With the delta variant on the rise, we could be seeing additional corona measures internationally.

On a hawkish statement by the BoE, Cable could rise above the 1.3900 with1.3925 and 1.3960

Citi stated yesterday a 10% equity market decline was very plausible, that will lead to some discussions.

Market participants seem to be al little on edge as we say yesterday in the FX moves, trade carefully.

Local Start Date	Local Time	Country/Region	Indicator Name	Period	Reuters Poll	Unit
5 Aug 2021	08:00	Germany	Industrial Orders MM	Jun	1.5%	Percent
5 Aug 2021	13:00	United Kingdom	BOE Bank Rate	Aug	0.10%	Percent
5 Aug 2021	13:00	United Kingdom	GB BOE QE Corp	Aug	20B	GBP
5 Aug 2021	14:30	United States	International Trade $	Jun	-73.9B	USD
5 Aug 2021	14:30	United States	Initial Jobless Clm	31 Jul, w/e	380k	Person
5 Aug 2021	14:30	Canada	Trade Balance C$	Jun	-0.80B	CAD
6 Aug 2021	05:00	New Zealand	Reserve Assets Total	Jul		NZD
6 Aug 2021	08:00	Germany	Industrial Output MM	Jun	0.5%	Percent
6 Aug 2021	08:00	United Kingdom	Halifax House Prices MM	Jul		Percent
6 Aug 2021	08:00	Norway	Reserve Assets Total	Jul		NOK
6 Aug 2021	08:45	France	Reserve Assets Total	Jul		EUR
6 Aug 2021	09:00	Switzerland	Forex Reserves CHF	Jul		CHF
6 Aug 2021	14:30	United States	Non-Farm Payrolls	Jul	900k	Person
6 Aug 2021	14:30	United States	Unemployment Rate	Jul	5.7%	Percent
6 Aug 2021	14:30	United States	Average Earnings YY	Jul	3.9%	Percent
6 Aug 2021	14:30	Canada	Employment Change	Jul	150.0k	Person
6 Aug 2021	14:30	Canada	Unemployment Rate	Jul	7.4%	Percent
7 Aug 2021		China (Mainland)	Exports YY	Jul		Percent
7 Aug 2021		China (Mainland)	Imports YY	Jul		Percent
7 Aug 2021		China (Mainland)	Trade Balance USD	Jul		USD
9 Aug 2021	03:30	China (Mainland)	PPI YY	Jul		Percent
9 Aug 2021	03:30	China (Mainland)	CPI YY	Jul		Percent

(Refinitiv)

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Morning Brew 05 August 2021

Erik Schafhauser

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Quarterly Outlook Q2 2022

Quarterly Outlook Q2 2022: The End Game has arrived

The End Game has arrived

Productivity and innovation have never been more important

The great EUR recovery and the difficulty of trading it

Tight commodity markets – turbocharged by war and sanctions

Between a rock and a hard place

The Great Erosion

Australian investing: Six considerations amid triple Rs: rising rates, record inflation and likely recession

Cybersecurity – the rush to catch up with reality

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