Senior Relationship Manager
Summary: Event Risk ahead as traders grow complacent
Good morning,
The US CPI came slightly lower than Analysts had expected but the PPI on Tuesday had shifted traders expectations to foresee an even loser number. After the CPI came at 2.9% vs an expectation of 3%, we saw a slight shift in the rate cut path. While after the PPI we were at 50/50 for at 25 of 50 basis point cut, we are now at 62/38 in favor of 25 BPS.
Equity Indexes managed to close in the green but there was decent underlying volatility and Mega caps gave up some ground after the sharp recovery. The Dow gained 0.61%, the S&P 500 0.38% and the Nasdaq 0.03%. The US30 is trading above 40k and the GER40 is testing the 18k. The Vix only needed 7 sessions to reverse to the long term median from the recent spike, that is the fastest return to complacency ever, let us see if it is justified. Sentiment is driven by statistics that there was never a recession coinciding with a US election and traders seem to be certain he fed wants calm waters for the election, it may be too carefree. Manage your risk carefully.
Charu took a look at Buffett's Portfolio Shifts . Warren Buffett’s Berkshire Hathaway has filed its latest 13F filing. This has once again captured the attention of investors worldwide, offering a glimpse into the Oracle of Omaha’s latest strategic decisions and market outlook. Strategic Buffett's new investments in Heico Corporation and Ulta Beauty signal a strategic move into aerospace and retail, highlighting his ongoing diversification efforts.
10 year yields remain low at 3.83 and the USD Index is at 102.55 with EURUSD holding above the 1.10 for now, GBPUSD 1.2850 and USDJPY 147.15. Gold and Silver are 2457 and 27.95 after decent swings, Bitcoin dropped below 60k.
The Key event risk today stems from US data in the form of Initial Jobless Claims (14:30) expected at 235k, Retail Sales (14:30) at 0.3%, Philly Fed (14:30) at 6 and Industrial Production at (15:15) , we have key earnings as shown below
Chinese data came mixed in the night with Retail Sales higher at 2.7% vs 2.6% expected but Urban investment and industrial output disappointing. Japans GDP came a full percentage point higher than expected.
Geopolitically, there are truce talks in Qatar but Hamas will not attend, US Secretary of State Blinken is also reported to have postponed a trip to the middle east.
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
Expiries (in UTC)
Physically Settled Futures
FCEQ4 will expire on 16/aug 1400 hrs.
HEQ4 will expire on 14/aug 1700 hrs.
GIQ4 will expire on 15/aug 1840 hrs.
MCLU4 will expire on 19/aug 1830 hrs.
OBFQ4 will expire on 16/aug 1400 hrs.
QMU4 will expire on 19/aug 1830 hrs.
WBSU4 will expire on 19/aug 1830 hrs.
CLU4 will expire on 20/aug 1830 hrs
Expiring CFDs
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COFFEENYSEP24 will expire on 20/aug 1500 hrs
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