Senior Relationship Manager
Summary: Risk on in a week with little economic data
Good Morning,
Risk on sentiment drove stocks in to a strong weekly close that saw the S&P 7% higher . The Dow gained 2.7% the S&P 3.06 and the Nasdaq 3.3% on Friday. Driver was mainly that the economic slowdown and falling commodity prices would allow the FED and other central banks to be less hawkish.
Over night, sentiment remains strong and the GER40 gains to 13167, a break above 13220 would allow for 13500.
US 10 Year yields are at 3.18%, EURUSD 1.0560, GBPUSD at 1.2275, Gold and Silver could gain to 1834 and 21.35 – back in mid range. Oil gains off the low to trade at 107.20 in the US line.
At the G7 Meeting it was announced that an Import ban on Russian Gold is being planned, a break out of the range will likely be driven by rising short term rates, negative for gold, and the probability of a recession – implying rate cuts, positive for gold.
Bitcoin can recover to above 21k and ether to 1215.
The Turkish lira gained an on intervention that restrict lira lending to many companies with more than $1 million in foreign currency cash in the latest step to reverse a slide in the currency.
Russia is likely to in default as bond holders did not receive coupon payments by now
Swiss judges will announce their verdict if Suisse failed to prevent money laundering related to cocaine trafficking.
A winding-up petition has been filed against embattled property developer China Evergrande Group.
A complaint has been filed against Google in Denmark against the Google Job search.
This weeks key events are US Durable Goods Orders today at 14:30, US consumer Confidence tomorrow at 16:00 EU Consumer Confidence and the US GDP on Wednesday Thursday UK GDP, Swiss KOF, German and EU Unemployment,, German Price data, as well as US Consumption data Friday the Japanese will be released, followed by the Chinse and international PMIs
We are likely to see half year and quarterly position adjustments and overall nervous trading, the lack of decisive economic data will make for news driven trading
Expiries
Physically Settled Futures:
NGN2 will expire 27th June at 15:00 GMT
TTFMN2 will expire 28th June at 15:00 GMT
CNM2 will expire 29th June at 8:35 GMT
RRN2, SILN2, SIN2, STFN2, XCN2, XKN2, XWN2, ZCN2, ZLN2, ZMN2, ZSN2 will expire 29th June at 15:00 GMT
Expiring CFDs:
COPPERUSJUL22, CORNJUL22, GASOLINEUSJUL22. HEATINGOILJUL22, SILVERJUL22, SOYBEANOILJUL22, SOYBEANMEALJUL22, SOYBEANSJUL22, SUGARNYJUL22, WHEATJUL22 will expire on 28th of June at 15:00 GMT
CHINA50JUN22, HK50JUN22,SINGAPOREJUN22, TAIWAN95JUN22 will expire 29th June at 2:00 GMT
Remain cautious!
AI: The good, the bad, and the bubble
While a deep recession may not be iminent thanks to central bank policy, interest rates will have to stay high for longer, and this will be accompanied by volatility risk from the unwinding of bubbles, especially within AI.
Steen Jakobsen,
Chief Investment Officer
The emergence of advanced AI systems is by far the most surprising event this year, turning everything upside down, while risks and benefits are debated. AI will also become an arms race between the US and China.
Peter Garnry,
Head of Equity Strategy
As China navigates global fragmentation, its cycle of technology application, productivity enhancement, and growth is threatened by US breakthroughs in generative AI, limited computing power, and geopolitical tensions.
Redmond Wong,
Market Strategist
Japan’s expertise in semiconductors and robotic integration could be the foundation of AI dominance. Combining two of this year's themes, Japanese equities and artificial intelligence, brings a wave of opportunities.
Charu Chanana,
Market Strategist
The AI fever has turned the technology into a darling, pushing crypto further into no-man’s-land. There are striking similarities between AI and crypto, and if these are to come full circle, AI won't be spared for bubbles.
Mads Eberhardt,
Cryptocurrency Analyst
Stocks related to artificial intelligence (AI) have appeared on investors' radars. Expectations are high, but it may be necessary to consider how to get exposure to AI in a diversified way.
Hans Oudshoorn,
Trainer Academy
The USD is on its back foot as markets celebrate an eventual Fed rate peak and steady long US yields. The stakes are even higher for the Japanese yen if longer major sovereign yield curves have to price in economic acceleration.
John J. Hardy,
Head of FX Strategy
While commodities, broadly speaking, have faced some tough months, a partial reversal during June could signal that the asset class is getting back on its feet with energy holding up and precious metals with upside potential.
Ole S. Hansen,
Head of Commodity Strategy
As inflation remains high central banks face hard decisions about whether they should keep hiking interest rates or stop. Meanwhile, the rise of AI creates bubble-like conditions that only make the decision harder.
Althea Spinozzi,
Senior Fixed Income Strategist