Senior Relationship Manager
Summary: Quo Vadis
Good Morning,
Traders and investors had a bit if a hard time digesting the strong rise in risk sentiment last week, profit taking, coupled with the limited fallout of the FTX collapse, News Amazon will cut staff and comments from Fed speakers on the likely path from here.
Indexes gave up a little ground yesterday and the Dow fell by 0.63%, S&P 500 by 0.89%, Nasdaq by 1.12%, over night we see them rise again and the US 500 is at 3977, the USTECH100 at 11.800 and the GER 40 14333.
US 10 year rates are trading below 3.90 and the Terminal Rate remains at 4.90 (in May/June 2023)
The USDINDEX EURUSD is just below 107 as EURUSD 1.0330. USDJPY 140.30 and GBPUSD at 1.1780. Gold and Silver are high at 1770 and 22.
Bitcoin seems to stabilize above 16k and is currently trading at 16700.
The direction from here will depend on ne next key data points, today the EU GDP a, the German ZEW US PPI expected at 8.3% , tomorrow the UK CPI/ PPI, US Retail Sales and Canada`s inflation.
Thursday the EU HICP expected at 10.7% and Friday the UK Retail sales.
The G20 has the potential to deliver possible surprises and Donald Trump has announced an important announcement for today where it is expected he will announce his running for the presidency again in 2024 – Even though he is the clear loser of the midterms.
Key Earnings:
Headlines:
Trade Safely
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