Senior Relationship Manager
Good Morning,
Inflation worries dominate again and is likely to dominate the week. The USD Index is at the highest level in June and we are looking at an interesting week. The most important data releases are the US CPI on Friday and the ECB Rate decision on Thursday.
The US 10 year rates rose to above 3% again and are currently trading at 3.05%, the German at 1.33 and the Italian at 3.42. The IT-DE spread makes life for the ECB particularly difficult.
EURUSDD fell below 1.07 again to trade 1.0670, GBPUSD is below 1.25 again while the Japanese Yen continues it`s decline to trade at 20 year lows near 133. Gold and Silver are in mid- range after being rejected at the upside and trade at 1838 and 21.80. Bitcoin has trouble to move away from the 30k.
Equities are in limbo, gaining slightly yesterday but giving up ground this morning. The Dow is trading at 32700, the US500 4100 and the GER40 at 14550.
The technical picture looks interesting with Equities having more room to the upside while Bonds seems to be bearish.
Boris Johnson survived the vote to oust him as OM yesterday but managed to receive only app 60% of the votes from within his own party.
Elon Musk warned again that he would not follow through with his takeover of Twitter if Twitter does not provide the data he requested.
The RBA, Australia’s central bank raised interest rates by 50 Basis point, the most in 22 years, acc to Reuters. The AUD spiked higher but gave up most of the gains again.
German Industrial orders were just releases 3% below expectations at -2.7%.
Most important Data today is the Swiss FX reserves at 9:00, the EU Sentix Index at 10:30 and the Ivey PMI at 16:00, Over night the Korean and Japanese GDP will be released.
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.