Senior Relationship Manager
Summary: What was Bitcoin?
Good Morning,
Markets appear a bit uninspired and undecided at the moment, Indexes seem to be looking for the next clue on where to go. The Dow lost -1.14% yesterday, the S&P -0.20% and the Nasdaq 0.14% but at second glance, there are strong moves.
Tesla exceeded it`s sales expectation in China and shares rose more than 7%, Goldman Sachs disappointed with earnings at USD 3.3 per share against an expectation of 5.48, shares fall 6.5% while Morgan Stanley on beating estimates and shares rise 6%.
The GER40 has breached the 15200 in stride and has room to the upside.
Bitcoin has risen 27% this year and is trading at 21300.
In FX the Bank of Japan provided a big surprise by keeping it`s accommodative stance and keeping the max yield for the 10 year JGB at 0.5%. The Yen fell massively on the news and USDJPY surged from 128.50 to 130.70 or 2%.
The USD Index rises from below 102 to 102.65, EURUSD falls to below 1.08 to trade 1.0780. Technically there is still lots of room to the upside, Kim sees 1.1170 and even 1.14 as possible . GBPUSD rose to 1.2290 and EURCHF fell below parity.
Todays Focus will be on the UK CPI at 8:00, the EU HICP at 11 and the US retail sales at 14:30 followed by industrial production at 15:15.
The overall question remain the Fed path and as well as the question of the looming recession – will it come? When and how bad?
For now the stance remains that the Feed will hike 25 basis points on Feb 1 and reach the peak in June at 4.9% in May / June , the rate in December is seen at 4.4%.
Economic Data & Earnings
Wednesday
UK CPI
EU HICP Final
US PPI, Retail Sales, Capacity Utilization
Earnings: Charles Schwab,
Thursday
Swiss PPI
US Labor Data
Netflix, Procter & Gamble, Northern Trust
Friday
Japan CPI,
Germany PPI
Earnings: Sandvik, Schlumberger, State Street
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.