Erik Schafhauser Zürich Erik Schafhauser Zürich Erik Schafhauser Zürich

Morning Brew May 31 2023

Morning Brew 1 minute to read
Erik Schafhauser

Senior Relationship Manager

Summary:  Markets extremely divergent


Saxo Morning Brew

We are seeing interesting divergences in markets at the moment and it is not easy to identify the current drivers.

While Nvidia passed the 1 trillion market cap yesterday, everything but big tech seems to be in Limbo. The Hang Seng is approaching bear market territory, almost 20% off the recent high. Peter wrote a very strong piece on AI stocks (link below) - it seems a bit off that Nvidia is trading at 40 times sales.

The Debt ceiling seems on the track to being resolved again after the House Rules Committee voted 7-6 to approved passage to the house, a vote is expected today.

US Yields are extremely volatile with the 1 month yield now at 5.3% from 5.8% just yesterday. Althea wrote an outlook for near term yields, pasted below. The 2 year fell to 4.45 from a high of 4.65 on Monday, the probability of a 25 BPS hike in 2 weeks remains near 60%.

The Change in Indexes yesterday was minute with all big three US indexes within a span of 0.5%. Weak Chinese data weighs on sentiment this morning and the US 500 is at 4191, the US 30 32.897 and the GER40 at 15820. Tesla rose on Elon Musk visiting China

The USD Index is trading at 104.30 with EURUSD at 1.07, GBPUSD 1.2390 and USDJPY 139.40. Gold broke aboe the important 1950 again and Silver is at 23.30.

With rates and inflation expectations extremely volatile, consider your FX exposure for speculation as well as fundamentally. It might be a good time to hedge any FX risk you carry. On the 14th and 15th of June we are expecting the FOMC and the ECB rate decision, also the SNB will announce rated after 3 months, it is seen to hike by 25 basis points with 85% probability.


Today we are expecting a good amount of secondary datapoints, the German import prices just came out even lower than expected indicating inflation may be cooling, the German CPI cold confirm that at 14:00 CET, the Chicago PMI is likely the most important US Datapoint at 15:45.

Expect volatility also from month end adjustments as well as the debt ceiling vote.


Key Articles:

The AI hype feels like an echo from past bubbles


COT: Gold length reduced but no appetite for short selling


FX Update: Greenback shrugs off debt ceiling deal

Prepare for a liquidity squeeze and higher US Treasury yields



U.S.                 Chicago PMI (May)

U.S.                 JOLTS job openings (Apr)

U.S.                 Fed Beige book

Germany         CPI EU harmonized (May)

Japan              Industrial production (Apr)

Japan              Retail sales (Apr)

Japan              Housing starts (Apr)

China               NBS manufacturing PMI & non-manufacturing PMI (May)

Australia          CPI (Apr)

India                Real GDP (Q1)

South Korea    Industrial Production (Apr)

Earnings: Salesforce, Crowdstrike, Okta

Thursday 1 June


U.S.                 ADP private employment (May)

U.S.                 Initial jobless claims (weekly)

U.S.                 ISM manufacturing index (May)

Eurozone         CPI EU harmonized (May)

Japan              Investment in plant and equipment (Q1)

China               Caixin manufacturing PMI (May)

Earnings: Broadcom, VMware, Lululemon Athletica, Dell Technologies, MongoDB, Zscaler, Dollar General, Hormel Foods, Bilibili


Friday 2 June


U.S.                 Non-farm payrolls, average hourly earnings, & unemployment rate (May)


HOM3 will expire 31 May 2023 at 15:00 GMT

RBM3 will expire 31 May 2023 at 15:00 GMT



Expiring CFDs

OILUKJUL23 will expire 31 May at 15:00 GMT

LIVECATTLEJUN23 will expire 01 Jun at 15:00 GMT




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