Morning Brew August 14 2024

Good morning,

A lower than feared PPI yesterday leavest he Fed room to cut rates, 50 basis points re at 55% right now. The gained S&P 1.7%, Nasdaq 2.4%, the Dow 1.%, Nvidia gained 6.5%, Tela 5.2% Bitcoin is above 60k again, the GER40 is back at 17890.

Starbucks posts its biggest one-day gain at 24.5% after announcing Brian Niccol as new CEO Chipotle, his current employer lost 7.5%. He seems to be highly valued. Walmart reported higher earnings but an expected slowdown of sales in the rest of the year due to high rates. The company sees high rates slowing demand for home improvement projects. UBS reported a net profit of $1.14 billion, beating analysts ‘expectations.

10 Year Yields fell to 3.85 and the USD Index to 102.67, EURUSD is 1.0990, GBPUSD 1.2860 and USDJPY 147.01.  The Reserve Bank of New Zealand (RBNZ) cut rates unexpectedly over night, the Kiwi loses 1% against the USD. Charu comments: Economic conditions in New Zealand are deteriorating, with broadening weakness across sectors. Softening inflation, along with cracks in the economy, gave room to the RBNZ to initiate its rate cut cycle. Inflation fell to 3.3% YoY in Q2, down from 4.0% in Q1… While this move was not anticipated by the consensus, we argued that any delay in starting the easing cycle could risk the RBNZ falling behind the curve.

Gold and Silver are looking for direction at 2460 and 27.70. First Majestic Silver is running an add campaign outlining the the new Samsung EV batteries require much more Silver than previous batteries , Samsung is looking to mass-produce the batteries from 2027.

Today, we keep an eye on Ukraine and Israel, Ukraine reports it has more than 70 villages under it`s control and Iran warned it may attack Israel if there is no imminent progress in the ceasefire talks. US Politics remain in focus as Trump is continuously falling behind in the polls and that seems to make him more erratic.

In terms of Data, we are now looking forward to the French and US CPI Pls find the preview for the CPI here THE EXPECTAIONS IS Headline CPI YoY 3.0% vs 3.0% (June) and Core CPI YoY 3.2% vs 3.3% (June). The EU GDP will only find attention it is misses the 0.6% expected.

Remain cautious of sharp moves driven my any of the factors above and of course the ones we don`t currently expect.

Wednesday

- Data SE, UK, FR& US CPI, EU GDP
- Earnings: Tencent, PetroChina, CCB, Commonwealth Bank of Australia, China Shenhua Energy, China Life Insurance, Meituan, Hapag-Lloyd, UBS Group, Cisco Systems, E.ON

Speakers: Musalem, Harker

Thursday
- Data Japan GDP, China Retail Sales, UK GDP, US Retail Sales, Initial Jobless claims, Industrial Production
- Earnings: NU Holdings, Walmart Applied Materials, Alibaba, Deere, JD.Com
Friday
- Data Japan Tankan, UK Retail Sales, EU Trade Balance, US Housing starts

- Earnings:  Adyen