Erik Schafhauser Zürich Erik Schafhauser Zürich Erik Schafhauser Zürich

Morning Brew June 12 2023

Morning Brew 1 minute to read
Erik Schafhauser

Senior Relationship Manager

Summary:  Key week ahead in markets with key fundamentals, central banks and nervous traders CS ceases to be

Equities are holding up over the weekend and FX Is fairly calm ahead of a key week

The US 500 is trading at 4300, the US tech 14578 and the GER40 16000 after Tesla boosted markets on Friday gaining additional 4%. Peter wrote on the reasons:

The USD Index is slightly off Fridays lows at 103.60 and the 10 Year Rate at 3.75. EURUSD  is 1.0750, GBPUSD 1.2575 and USDJPY 139.50. Gold and Silver give up ground from Friday and are trading at 1960 and 24.15 at the moment. Bitcoin fell below 26k on regulatory worries and Oil is under pressure again falling below the 70 USD on demand worries.

The Turkish Lira hit another all time Low overnight, at 9:00 there is the next rould of Turkish data that could have na impact.

UBS completes it`s takeover of CS from a legal standpoint creating a Banking Giant with 120k enmp0l.oyees and USD 5 Trillion in assets.
The week will be driven by key economic data as well as central bank decisions. Tomorrows US CPI will give the last impulse ahead of the FOMC rate decision. As of now, the probability of no action by the Fed on Wednesday stands at 72% and any shifts will drive markets until then

Central Bank assessment by our strats:

US FOMC: Could CPI play a spoilsport to the expected June pause?

Market expectations are calling for the Fed to leave policy unchanged at the June meeting (decision due at 2 am SGT on June 15), taking perhaps a necessary break to continue to assess the cumulative impact of the aggressive hiking cycle. While that makes sense, hawkish tremors were felt last week after surprise rate hikes from the Reserve Bank of Australia and Bank of Canada. That has raised the possibility that we get another hike, dependent on the CPI data that is scheduled to be released on the first day of the Fed meeting. Bloomberg consensus expects May CPI to come in at 4.1% YoY, the weakest since March 2021, from 4.9% previously. Core CPI is expected to slow to 5.2% YoY in May from 5.5% previously. If the core inflation number surprises on the high side for either the month-on-month or year-on-year readings, the Fed may be forced to consider another rate hike than stand pat. Even if the CPI is in-line with expectations and the June pause prevails, there will potentially be some dissenters as some Fed voters such as Lorie Logan and Michelle Bowman have been increasingly commenting against a June pause. The dot plot will also be key to watch at this week’s meeting, to gauge PCE forecasts and the potential for more rate hikes given continued strength in the labor market. The bias remains toward USD strength going into this week – both if the Fed is hawkish but also on the hit-to-risk sentiment if the Fed turns out to be dovish.


ECB: A 25-bps rate hike seems to be a “done deal”

The European Central Bank is widely expected to hike rates by 25bps on Thursday to take the deposit rate to 3.50%. Since the last meeting when the ECB slowed down the pace of rate hikes from 50bps increments to 25bps headline Eurozone CPI has cooled to 6.1% from 7.0%, whilst the “super-core” measure fell to 5.3% from 5.6%. Furthermore, the ECB’s Consumer Expectations survey for April saw the 1yr ahead inflation expectation decline to 4.1% from 5.0% and 3yr view fall to 2.5% from 2.9%. That said, despite the disinflationary impulses, President Lagarde has reiterated that inflation “is too high and is set to remain so for too long”, adding that the ECB will “keep moving forward” as the bank is still behind the curve. However, growth trajectory is also worrisome with Germany and Eurozone in a technical recession, and if the ECB decides to (like Bank of Canada) remove all forward guidance, it could mean a firmer downside for EURUSD below 1.07.


Bank of Japan: Recent inflation and wage data provides little scope for policy tweaks

The Bank of Japan is expected to keep its policy unchanged at this week’s meeting after Governor Ueda declared that the central bank would take up to eighteen months to conduct a policy review. Meanwhile, Tokyo inflation and wage growth data has surprised on the downside recently. Headline May Tokyo CPI slowed to 3.2% YoY from 3.5% in April, while April’s real cash earnings were down 3% YoY from -2.3% previously. This suggests that the post-pandemic consumption boost is fading and provides the BOJ enough reasons to keep its stimulus measures intact as it continues to review the long-term effects of its yield curve control policy. Key focus remains on the Japanese yen and how much further it can fall if FOMC surprises with a rate hike this week, and whether that can prompt any reaction tweak from the BOJ this week. The odds are low, but scope of a surprise is potentially large given expectations remain modest.

Economic Data and Earnings: 

Monday June 12
Turkey Current Account Balance,
Unemployment Rate (%)
Czech Republic CPI YY
Earnings: Oracle, Vantage Towers


Tuesday June 13
UK Unemployment rate
Germany HICP, ZEW
Ashtead Group


Wednesday June 14
US PPI Machine Manuf'ing

Rate decision

Earnings: Lennar

Thursday June 15

Japan Trade
China Retail Sales
ECB Refinancing Rate
US Retail Sales MM

Earnings: Adobe, Kroger, Jabil, Halma

Friday June 16

Italy CPI



The Saxo Bank Group entities each provide execution-only service and access to Analysis permitting a person to view and/or use content available on or via the website. This content is not intended to and does not change or expand on the execution-only service. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Rules of Engagement and (v) Notices applying to Saxo News & Research and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Bank Group by which access to Saxo News & Research is gained. Such content is therefore provided as no more than information. In particular no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Bank Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Bank Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on Saxo News & Research or as a result of the use of the Saxo News & Research. Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Bank Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. Saxo News & Research does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of our trading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication under relevant laws.

Please read our disclaimers:
Notification on Non-Independent Investment Research (
Full disclaimer (
Full disclaimer (

Saxo Bank A/S (Headquarters)
Philip Heymans Alle 15

Contact Saxo

Select region


Trade responsibly
All trading carries risk. Read more. To help you understand the risks involved we have put together a series of Key Information Documents (KIDs) highlighting the risks and rewards related to each product. Read more

This website can be accessed worldwide however the information on the website is related to Saxo Bank A/S and is not specific to any entity of Saxo Bank Group. All clients will directly engage with Saxo Bank A/S and all client agreements will be entered into with Saxo Bank A/S and thus governed by Danish Law.

Apple and the Apple logo are trademarks of Apple Inc, registered in the US and other countries and regions. App Store is a service mark of Apple Inc. Google Play and the Google Play logo are trademarks of Google LLC.