Senior Relationship Manager
Summary: A possibly quiet day
Good Morning,
Despite a lower than feared PPI yesterday, San Francisco Federal Reserve Bank President Mary Daly appeared on Bloomberg with rather hawkish tones. She said she preferred a 50 BPS Hike in September but thar she was open to a 75 bps hike should date require it.
Equities gave up some ground on that note but not significantly. The Dow gained 0.08%, the S&P fell by 0.07% and the Nasdaq fell by 0.6%. maybe most interesting was that the S&P 500 failed to close above the 50 retracement line if the January / June decline.
The GER 40 is trading at 13700 and looking for inspiration.
EURUSD tested the 1.0350 resistance yesterday but failed to break higher and retreated to 1.0320, GBPUSD is meandering around the 1.22 and USDJPY 133.25. The USD Index is trading at 105.15 and there is some technical support at 105.00.
US Yields rose to 2.87 for the 10 year and we remain strongly inverted with the 2 year at 3.21.
Gold and Silver gave up ground yesterday but could recover a little to now trade at 20.38 and 1791. The US Oil Contract tested the 200d Moving average yesterday but failed to break it, we are currently at 93.93 and the MA at 94.97.
Bitcoin is a little off the recent highs but holding near 24k and Ethereum 1890.
Just now, UK data came less bad than expected with the Monthly GDP only falling 0.6% vs the expected 1.3% and industrial output at 2.4% vs 1.6% expected.
On todays radar we have the French and Spanish CPI at 8:45 and 9:00, the EU Industrial production at 11:00. Out of the US we expect the Import Prices at 14:30 and the University of Michigan Sentiment at 16:00.
With little key economic data, we keep an eye on event risk out of China/Taiwan, Ukraine and mainly the Fed for moves. It could be a fairly quiet day for once if there are no surprises with time to plan positions and investments rather than reacting to data.
Peter Garnry held a webinar yesterday on Equity Market Update: Earnings review and protecting your portfolio
All webinars are available on the page in the lower part if you missed it.
Earnings:
Expiries
Physically Settled Futures:
Lean Hogs (HEQ2) will expire 12th Aug at 17:00 GMT.
Cocoa (CCU2) will expire 17th Aug at 15:00 GMT.
Expiring CFDs:
Cocoanysep22 will expire 16th Aug at 15:00 GMT.
Futures can be rolled online via the Futures Spread Trade Ticket. Any open positions will be closed after the mentioned times.
AI: The good, the bad, and the bubble
While a deep recession may not be iminent thanks to central bank policy, interest rates will have to stay high for longer, and this will be accompanied by volatility risk from the unwinding of bubbles, especially within AI.
Steen Jakobsen,
Chief Investment Officer
The emergence of advanced AI systems is by far the most surprising event this year, turning everything upside down, while risks and benefits are debated. AI will also become an arms race between the US and China.
Peter Garnry,
Head of Equity Strategy
As China navigates global fragmentation, its cycle of technology application, productivity enhancement, and growth is threatened by US breakthroughs in generative AI, limited computing power, and geopolitical tensions.
Redmond Wong,
Market Strategist
Japan’s expertise in semiconductors and robotic integration could be the foundation of AI dominance. Combining two of this year's themes, Japanese equities and artificial intelligence, brings a wave of opportunities.
Charu Chanana,
Market Strategist
The AI fever has turned the technology into a darling, pushing crypto further into no-man’s-land. There are striking similarities between AI and crypto, and if these are to come full circle, AI won't be spared for bubbles.
Mads Eberhardt,
Cryptocurrency Analyst
Stocks related to artificial intelligence (AI) have appeared on investors' radars. Expectations are high, but it may be necessary to consider how to get exposure to AI in a diversified way.
Hans Oudshoorn,
Trainer Academy
The USD is on its back foot as markets celebrate an eventual Fed rate peak and steady long US yields. The stakes are even higher for the Japanese yen if longer major sovereign yield curves have to price in economic acceleration.
John J. Hardy,
Head of FX Strategy
While commodities, broadly speaking, have faced some tough months, a partial reversal during June could signal that the asset class is getting back on its feet with energy holding up and precious metals with upside potential.
Ole S. Hansen,
Head of Commodity Strategy
As inflation remains high central banks face hard decisions about whether they should keep hiking interest rates or stop. Meanwhile, the rise of AI creates bubble-like conditions that only make the decision harder.
Althea Spinozzi,
Senior Fixed Income Strategist