Senior Relationship Manager
Summary: Markets are nervously looking for direction - remain nimble or diversify
Good Morning,
Markets see sawed yesterday and closed not far from the open. All 3 US Indexes moved less than 0.2%.
Jerome Powell’s testimony provided little of note except reiterating that the FED was committed to tackling inflation while attempting to avoid a recession.
Real estate data shows that sales are falling as mortgage rates rise raising worries on the impact of the rising rates.
Commodities continue to fall on growth worries also pulling Gold and Silver lower but both remain mid range and need to break out for a clear direction. Silver is 20.45 – 22.50 and Gold 1780 – 1880
EURUSD is trading at 1.0562, GBPUSD at 1.2250 and USDJPY was extremely volatile during the night trading a range from 136.25 to 135.15 and is now at 135.85. Keep an Eye on the Turkish Lira due to the rate decision at 13:00
Crypto remains undecided near the lows, Bitcoin at 20500 and ETH at 1100.
Elon Musk pointed out his factories in Germany and Texas were losing billions due to supply chain issues.
Next to economic news, there are three key summits over the next days : EU, G7 and Nato will meet and discuss to a large degree the situation in Ukraine and how to deal with Russia in the next months
Unless the economic data is a large surprise, comments out of central banks and politics are likely to dominate the next few days and jumps can be expected., demanding caution in trading. Diversification and asset allocation is key along with risk management.
Key data today is a selection of Purchasing Manager Indexes:
9:15 France, expected at 56
9:30 Germany, expected at 54
10:00 EU expected at 54
10:30 UK expected at 52.6
15:45 US expected at 53.5 for Services and 56 for Manufacturing
Besides, Turkey will announce ratees at 13:00 and at 14:30 the normal US Labor data.
Tomorrow, UK Retail sales, the Spanish GDP, German IFO and US Building Permits will be released along the University of Michigan Sentiment.
Expiries
Physically Settled Futures:
CCN2, CTN2 will expire 23th June at 15:00 GMT
RCN2 will expire 24th June at 15:00 GMT
NGN2 will expire 27th June at 15:00 GMT
Expiring CFDs:
NATGASUSJUL22 will expire on 24th of June 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.