Senior Relationship Manager
Summary: Risk On Sentiment gains traction on weak GDP
Good Mornings,
Monday is the Swiss national holiday, we will be back Tuesday.
We are observing Risk On sentiment across the board, Indexes rose app 1% and could continue with approximately another percent gain over night fueled by Apple and Amazon. Both companies could exceed expectations and rose 3% and 12% after hours. The GER40 is nearing the important resistance just below 13400.
A quite severe miss in the first reading of US GBP for Q2 at -0.9 vs an expectation of +0.5% raised hopes of fewer rate hikes and there were also reports of investors getting back into positions after the rate decisions to not miss summer opportunities now that the rate hike risk in the US is over. Volumes were above average.
In FX, the USD Index fell to below 106, a 6 week low and EURUSD is trading at 1.0216, GBPUSD at 1.2195 and the JPY at 132.95!
Gold and Silver rose to 1765 and Silver breached the 20 again, to trade at 20.15, Bitcoin rose to 24k.
EURCHF is trading just 20 pips above 0.97 and the release of the Swiss National Banks reserves at 9:00 will be interesting. Is the Bank still active to weaken the Frank or has it even started to reducer it`s foreign reserves?
The Japanese production data over night surprised to the upside significantly, while 3.7% were expected, they rose by 8.9% and the French GDP came 0.3% higher than expected.
Todays key data is the French KOF and Official Reserves at 9:00, German Employment data at 9:55 and 10:00 as well as the EI HICP and GDP at 11:00, at 14:30 and 16:00 the US Consumption and University of Michigan Sentiment. Canadas GDP will be released at 14:30.
Key earnings are Exxonmobile P&G CBOE and Chevron
Our Kim Cramer was extremely productive yesterday with chart collections on :
European Equities: https://www.home.saxo/content/articles/equity/ta-eustocks-28072022
US Indexes: https://www.home.saxo/content/articles/equity/ta-us-stocks-28072022
US Treasuries: https://www.home.saxo/content/articles/commodities/ta-us10year-28072022
Yen: https://www.home.saxo/content/articles/forex/ta-jpy-28072022
Expiries
Physically Settled Futures:
HOQ2, RBQ2 will expire 29th July at 15:00 GMT.
Expiring CFDs:
OILUKSEP22 will expire 29th July at 15:00 GMT.
LIVECATTLEAUG22 will expire 4th Aug at 15:00 GMT.
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.