Senior Relationship Manager
Good Morning
Strong economic data and hawkish messages from the Fed are putting investors and traders on edge. Initially the strong PMIs drove risk sentiment yesterday, Equities, EUR, Gond and Silver could gain but hawkish comments out of the fed brought us back to similar levels we traded yesterday morning. The Dow closed -0.21%, the S&P 500 -0.11% and the Nasdaq +0.13%. Dax trades at 15500, the USD Index 91.82, US 10 Year rates at 1.49 and Bitcoin at 32636. Gold and Silver tried to break higher yesterday but failed to hold on to the gains, watch for the 200d MA in Silver at 25.70.
Atlanta Fed President Raphael Bostic and Fed Governor Michelle Bowman both hinted at the inflation – while temporary – would remain longer than previously thought and that rate hikes may be necessary in 2022 not 2023. Janet Yellen expects inflation to normalize next year. I would expect the tapering discussion to gain traction soon if data remains as strong.
Todays Key Events are the German IFO Index at 10:00 CET, the BOE at 13:00 CET and US Data at 14:30, any hint at still rising inflation may pressure the FED to commit.
In the BOE Rate decision at 13:00, no rate change is expected (Probability 99%) but the two focus points will be the Central Banks stance on the QE Program and any hint at a shift in the schedule of interest rate increases, currently expected for May 22. Any surprise here can cause sharp moves in GBP Crosses.
Local Start Date | Local Time | Country/Region | Indicator Name | Period | Reuters Poll | Unit |
24 Jun 2021 | 06:30 | Netherlands | GDP Final SA QQ | Q1 | -0.5% | Percent |
24 Jun 2021 | 06:30 | Netherlands | GDP Final NSA YY | Q1 | Percent | |
24 Jun 2021 | 08:00 | Germany | Import Prices MM | May | Percent | |
24 Jun 2021 | 08:00 | Germany | Import Prices YY | May | 11.3% | Percent |
24 Jun 2021 | 08:45 | France | Business Climate Mfg | Jun | 110 | Net balance |
24 Jun 2021 | 09:00 | Spain | GDP QQ | Q1 | -0.5% | Percent |
24 Jun 2021 | 09:00 | Spain | GDP YY | Q1 | -4.3% | Percent |
24 Jun 2021 | 10:00 | Germany | Ifo Business Climate New | Jun | 100.1 | Index |
24 Jun 2021 | 10:00 | Germany | Ifo Curr Conditions New | Jun | 97.5 | Index |
24 Jun 2021 | 10:00 | Germany | Ifo Expectations New | Jun | 103.5 | Index |
24 Jun 2021 | 13:00 | United Kingdom | BOE Bank Rate | Jun | 0.10% | Percent |
24 Jun 2021 | 13:00 | United Kingdom | GB BOE QE Corp | Jun | 20B | GBP |
24 Jun 2021 | 13:00 | United Kingdom | BOE MPC Vote Hike | Jun | 0 | Number of |
24 Jun 2021 | 13:00 | United Kingdom | BOE MPC Vote Unchanged | Jun | 9 | Number of |
24 Jun 2021 | 13:00 | United Kingdom | BOE MPC Vote Cut | Jun | 0 | Number of |
24 Jun 2021 | 14:30 | United States | Durable Goods | May | 2.7% | Percent |
24 Jun 2021 | 14:30 | United States | Durables Ex-Transport | May | 0.7% | Percent |
24 Jun 2021 | 14:30 | United States | GDP Final | Q1 | 6.4% | Percent |
24 Jun 2021 | 14:30 | United States | GDP Deflator Final | Q1 | 4.3% | Percent |
24 Jun 2021 | 14:30 | United States | Core PCE Prices Fnal | Q1 | 2.5% | Percent |
24 Jun 2021 | 14:30 | United States | Initial Jobless Clm | 19 Jun, | 380k | Person |
24 Jun 2021 | 14:30 | United States | Cont Jobless Clm | 12 Jun, | 3.458M | Person |
25 Jun 2021 | 00:45 | New Zealand | Imports | May | NZD | |
25 Jun 2021 | 00:45 | New Zealand | Trade Balance | May | NZD | |
25 Jun 2021 | 00:45 | New Zealand | Annual Trade Balance | May | NZD | |
25 Jun 2021 | 00:45 | New Zealand | Exports | May | NZD |
(Refinitiv)
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.