Erik Schafhauser Zürich

Morning Brew June 28 2024

Morning Brew 1 minute to read
Erik
Erik Schafhauser

Senior Relationship Manager

Summary:  Ultimo, PCE and Friday - Buckle up


Good morning

The first debate between Biden and Trump is over and it seems that Trump has come out of the first debate stronger than Biden, equity futures are slightly friendly. There as little new in terms of content but it seemed not very presidential or dignified.

Finding little inspiration yesterday, US Indexes rose minutely yesterday the Nasdaq gained 0.3% the S&P and the Dow 0.09%. Volumes were rather low at 9.5 billion shares.

Most exciting stocks were Nvidia down 1.9%, Wallgreens -22%. Levi Strauss -15% and Micron -7%.

Overall, many indexes have had a good month so far and regardless of what happens in the US Inflation data later today, the first half of 2024 will end in the green.

Yields are holding, the 10 year is at 4.30 and the USD Index 106.05. The Yen fell to a 38 Year low against the USD and Japan appointed a new top foreign exchange diplomat. USDJPY is just below 161 and EURUSD at 1.0690, GBPUSD 1.2630.

EURCHF is trading at 0.9615, this is likely the best measure of the Euros strength or weakness after the French election. The USD will be impacted by the PCE.

Gold and silver are mixed with Silver in the green and Gold slightly red at 29.15 and 2326. Goldman Sachs sees gold as having strong potential this year and sees the year end at 2700 or 16% higher. Remember that it is Friday and we have seen massive moves in to the last few weekends in

Today we expect the Swiss Leading Indicator at 9:00, KOF, the German unemployment at 9:55 CET and most importantly the US Inflation in terms of the Personal Consumption Deflator, PCE The PCE and the PCE Core are expected at 2.6% and will be releases at 14:30, the Chicago PMI at 15:45 and the University of Michigan sentiment at 16:00 are less crucial.

An additional source of volatility can be the Iranian presidential elections and Month, Quarter and half year ultimo.

There may be some nervousness in the Euro and or European Indexes as we have the first round of the French elections on Sunday,

Next week, the UK elections are important, Charu already took a  look at them:

  • The July 4 UK election is tilting in favor of a likely Labour majority, after a 14-year Conservative rule characterized by Brexit and the cost-of-living crisis.
  • With limited fiscal space, Labour is expected to focus on supply-side reforms and cautious fiscal policies, likely promoting long-term economic growth and stability.
  • Markets remain complacent with policy stability remaining the base case. UK assets have also attracted some safe-haven flows amid the election risks elsewhere in the US and Europe.
  • UK’s stock index FTSE 100 still trades at a significant valuation discount to global stocks, and offers a good dividend yield as well as scope for portfolio diversification.
  • Sterling could face short-term volatility if Labour’s victory is not as strong as anticipated, and if the Bank of England adopts a dovish stance post-election. However, long-term support for GBP may persist against the EUR due to contrasting political and fiscal stability between the UK and the Eurozone.

Trade safely!

 

Quarterly Outlook

01 /

  • Upending the global order at blinding speed

    Quarterly Outlook

    Upending the global order at blinding speed

    John J. Hardy

    Global Head of Macro Strategy

    We are witnessing a once-in-a-lifetime shredding of the global order. As the new order takes shape, ...
  • Equity outlook: The high cost of global fragmentation for US portfolios

    Quarterly Outlook

    Equity outlook: The high cost of global fragmentation for US portfolios

    Charu Chanana

    Chief Investment Strategist

  • Asset allocation outlook: From Magnificent 7 to Magnificent 2,645—diversification matters, now more than ever

    Quarterly Outlook

    Asset allocation outlook: From Magnificent 7 to Magnificent 2,645—diversification matters, now more than ever

    Jacob Falkencrone

    Global Head of Investment Strategy

  • Commodity Outlook: Commodities rally despite global uncertainty

    Quarterly Outlook

    Commodity Outlook: Commodities rally despite global uncertainty

    Ole Hansen

    Head of Commodity Strategy

  • Macro outlook: Trump 2.0: Can the US have its cake and eat it, too?

    Quarterly Outlook

    Macro outlook: Trump 2.0: Can the US have its cake and eat it, too?

    John J. Hardy

    Global Head of Macro Strategy

  • Equity Outlook: The ride just got rougher

    Quarterly Outlook

    Equity Outlook: The ride just got rougher

    Charu Chanana

    Chief Investment Strategist

  • China Outlook: The choice between retaliation or de-escalation

    Quarterly Outlook

    China Outlook: The choice between retaliation or de-escalation

    Charu Chanana

    Chief Investment Strategist

  • Commodity Outlook: A bumpy road ahead calls for diversification

    Quarterly Outlook

    Commodity Outlook: A bumpy road ahead calls for diversification

    Ole Hansen

    Head of Commodity Strategy

  • FX outlook: Tariffs drive USD strength, until...?

    Quarterly Outlook

    FX outlook: Tariffs drive USD strength, until...?

    John J. Hardy

    Global Head of Macro Strategy

  • Fixed Income Outlook: Bonds Hit Reset. A New Equilibrium Emerges

    Quarterly Outlook

    Fixed Income Outlook: Bonds Hit Reset. A New Equilibrium Emerges

    Althea Spinozzi

    Head of Fixed Income Strategy

Content disclaimer

None of the information provided on this website constitutes an offer, solicitation, or endorsement to buy or sell any financial instrument, nor is it financial, investment, or trading advice. Saxo Bank A/S and its entities within the Saxo Bank Group provide execution-only services, with all trades and investments based on self-directed decisions. Analysis, research, and educational content is for informational purposes only and should not be considered advice nor a recommendation.

Saxo’s content may reflect the personal views of the author, which are subject to change without notice. Mentions of specific financial products are for illustrative purposes only and may serve to clarify financial literacy topics. Content classified as investment research is marketing material and does not meet legal requirements for independent research.

Before making any investment decisions, you should assess your own financial situation, needs, and objectives, and consider seeking independent professional advice. Saxo does not guarantee the accuracy or completeness of any information provided and assumes no liability for any errors, omissions, losses, or damages resulting from the use of this information.

Please refer to our full disclaimer and notification on non-independent investment research for more details.

Saxo Bank A/S (Headquarters)
Philip Heymans Alle 15
2900
Hellerup
Denmark

Contact Saxo

Select region

International
International

All trading and investing comes with risk, including but not limited to the potential to lose your entire invested amount.

Information on our international website (as selected from the globe drop-down) can be accessed worldwide and relates to Saxo Bank A/S as the parent company of the Saxo Bank Group. Any mention of the Saxo Bank Group refers to the overall organisation, including subsidiaries and branches under Saxo Bank A/S. Client agreements are made with the relevant Saxo entity based on your country of residence and are governed by the applicable laws of that entity's jurisdiction.

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