Senior Relationship Manager
Good Morning,
The Fed hiked by 50 Basis points as expected but the 23 outlook was somewhat more hawkish suggesting rates near 5,1%. Fed Chairman Powell said it was not yet the time talk about rate cuts as the focus was still to push inflation down to 2%. While the market seems not to fully buy into that narrative, equities gave up some ground, the Dow closed down 0.42%, the S&P 500 0.61%, and the Nasdaq down 0.76%.
10 year rates jumped higher briefly but fell back to 3.47 and the USD Index fell back to 103.80. EURUSD is trading at 1.0650, Cable 1.2390 and USDJPY 135.65. Gold and Silver came under pressure and fell to 1792 and 23.25, Silver is down more than 2.5% on the day. . This was likely aided by disappointing Chinese data, industrial output grew only by 2.2% vs 3.6% expected and retail sales at a terrible -5.9% vs -3.7% expected.
The SEC in the US decided on new trading rules for stock trading including requiring retail stock orders to be sent to auctions before they are executed
Elon Musk sold further 22 mio shares in Tesla, totaling his sales near 40 bio.
Over the next days we have loads of expiries, pls check if you are affected and roll where necessary.
Todays Key events are :
Swiss National Bank at 9:00 hike by 50 BPS expected with 79%
Norwegian Central Bank at 10:00 hike by 25 BPS expected
Bank of England at 12:30 hike by 50 BPS expected with 75%
European Central Bank at 14:15 hike by 50 BPS expected with 78%
US Retail Sales 14:30 expected at -0.1%
Press conference by C. Lagarde at 14:45
Tomorrow we are expecting the UK Retail Sales, International PMI
Trade safely.
2024: The wasted year
Markets are driven by election optimism, overshadowing growing debt and liquidity concerns. The 2024 elections loom large, but economic fundamentals and debt issues warrant cautious investment.
As US economic slowdown hints at a shift away from exceptionalism, USD faces downside with looming Fed cuts. AUD and NZD set to outperform as their rate cuts lag. JPY gains on carry unwind bets and BOJ pivot.
Amid AI and obesity drug excitement, equities see varied prospects: neutral on overvalued US stocks, negative on Japan due to JPY risks, positive on Europe. European defence stocks gain appeal.
With the economic slowdown, quality assets will gain favour, especially sovereign bonds up to 5 years. Central banks' potential rate cuts in Q2 suggest extending duration, despite policy and inflation concerns.
Commodities poised for rebound. The "Year of the Metal" boosts gold and silver, copper awaits rate cuts. Grains may recover, natural gas stabilises. Gold targets $2,300-$2,500/oz, copper's breakout could signal growth.
Markets are driven by election optimism, overshadowing growing debt and liquidity concerns. The 2024 elections loom large, but economic fundamentals and debt issues warrant cautious investment.
As US economic slowdown hints at a shift away from exceptionalism, USD faces downside with looming Fed cuts. AUD and NZD set to outperform as their rate cuts lag. JPY gains on carry unwind bets and BOJ pivot.
Amid AI and obesity drug excitement, equities see varied prospects: neutral on overvalued US stocks, negative on Japan due to JPY risks, positive on Europe. European defence stocks gain appeal.
With the economic slowdown, quality assets will gain favour, especially sovereign bonds up to 5 years. Central banks' potential rate cuts in Q2 suggest extending duration, despite policy and inflation concerns.
Commodities poised for rebound. The "Year of the Metal" boosts gold and silver, copper awaits rate cuts. Grains may recover, natural gas stabilises. Gold targets $2,300-$2,500/oz, copper's breakout could signal growth.