Senior Relationship Manager
Summary: 200 Day Averages broken, NonFarm Key event today.
Good Morning,
After Powell`s fairly dovish speech, risk on sentiment remains firmly anchored even if we gave up some ground yesterday. The US 500 lost 0.1% yesterday, the Nasdaq gained 0.13% and the Dow lost 0.56%. Top movers were Salesforce (-8.3%), Dollar General (-7.5%).
The Nasdaq is still down 27% on the year and the US 500 14% for the year but the S&P has breached above the 200 day moving average, a technically bullish sign. The Vix trades at the lowest level since August, at just below 20. The swings are huge overall, Nvidia hit a low at 110 USD less than 2 months ago and is now 60 USD higher. If this move continues, we are in for quite a year end but remain on your toes and keep risk management in place.
The USD Index has lost 2.5 Points off the high this week, now trading at 104.65, GBPUSD is trading at 1.2235 and EURUSD has broken above the 200 day MA and trades 1.0530. 1.0750 is the next key level if continue higher. USDJPY is at 135, after hitting 152 this quarter. Gold and Silver gained to currently 1800 and 22.85, both having breached the 200 d MA as well.
Ten year yields for the USD are trading at 3.55, 0.8% lower than in October.
Today`s labor data will be closely watched for the next impulse, first, at 11 we are expecting the EU Producer Prices and at 14:30 the key US data, the Nonfarm Payroll is expected at 200k added jobs, the unemployment rate at 3.7% and average earnings at an increase of 0.3%.
On Monday, international PMI are the most important event.
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.