Senior Relationship Manager
Summary: Risk Off sentiment seems to fade
Good Morning,
Risk Off sentiment is fading with Us Indexes basically flat yesterday. 10 year US Interest rates are stable at near 3.7% and the USD Index near 104.
Movers of the day yesterday was USDJPY and precious Metals. USDJPY traded as low as 130.65 before recovering to now 132, gold and silver rose to above 1810 and 24. EURUSD remains just above 1.06 and GBPUSD 1.2165.
Overnight Index Futures gain app 0.4%, the GER40 is testing the 14000 again.
WTI crude oil gained 1% to USD76.1 on lower than expected inventories.
In the US, A 1.6 Trillion USD spending bill has been agreed on in the US to avoid a government shutdown supporting risk sentiment.
Elon Musk announced will step down as chief executive of Twitter as soon as he finds someone “foolish enough2 he said he would continue to run software and servers – he did not mention a focus back on Tesla.
Ukrainian President Zelenski is visiting the US today.
We see trading volumes declining into the year end, so trading will be mostly quiet but significant news will have an impact stronger than usual.
Economic releases:
Wednesday 21 December
Thursday 22 December
Friday 23 December
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.