Erik Schafhauser Zürich

Morning Brew September 10 2021

Morning Brew 1 minute to read
Erik
Erik Schafhauser

Senior Relationship Manager

Summary:  Lagarde keeps the calm


Good Morning

Christine Lagarde managed to keeps markets astonishingly calm yesterday with equities and FX trading fairly small ranges considering we saw a change in QE even if expected on the one hand and secondly designed to actually keep the PEPP program within it`s limits. "The lady isn't tapering," ECB President Christine Lagarde told a news conference to explain the decision, using a turn of phrase reminiscent of former British Prime Minister Margaret Thatcher's famous declaration "the lady's not for turning".

"What we have done today ... unanimously, is to calibrate the pace of our purchases in order to deliver on our goal of favorable financing conditions. We have not discussed what comes next," she said.(Reuters)

In the US Indexes traded slightly lower on some hawkish fed speakers and solid job data, the Dow and the S&P500 fell 0.4% the Nasdaq 0.25. Over night risk sentiment rises to a certain extent due to a call between Biden and Xi on the future relations.

Corona and vaccination is driving the headlines today as internationally the pressure on the unvaccinated rises. In the US, the Biden administration is seeking to mandate federal employees to be vaccinated, Switzerland will widely exclude persons without a corona certificate from public life and Germany is trying to cut benefits to unvaccinated people needing to quarantine themselves.

The UK GDP was just released quite bad at 0.1% vs 0.6% expected. The Bank of England is expected to raise borrowing costs by end-2022 according to a poll of FX analysts.

Looking at the larger picture, most markets are rangebound with US indexed near but off the highs, Dax 15400/16000 currently at 15655 , EURUSD remains range bound between the August low at 1.1665 and 1.1910, currently at 1.1825, XAUUSD 1680/1830 (currently 1800) XAG 22.50/25 (24.20) . A larger push will be needed to break out, potentially this could happen with the next FOMC meeting where hawks are looking to make sure their voice is considered well in advance – will Powell listen?

Crypto has stabilized at 46600 (Bitcoin) and 3440 for Ethereum.

Key event today is the US PPI expected at 8.2 YoY and 0.6 MoM. The release will happen at 14:30.

Trade safely!

 

Disclaimer

The Saxo Bank Group entities each provide execution-only service and access to Analysis permitting a person to view and/or use content available on or via the website. This content is not intended to and does not change or expand on the execution-only service. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Rules of Engagement and (v) Notices applying to Saxo News & Research and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Bank Group by which access to Saxo News & Research is gained. Such content is therefore provided as no more than information. In particular no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Bank Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Bank Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on Saxo News & Research or as a result of the use of the Saxo News & Research. Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Bank Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. Saxo News & Research does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of our trading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication under relevant laws.

Please read our disclaimers:
Notification on Non-Independent Investment Research (https://www.home.saxo/legal/niird/notification)
Full disclaimer (https://www.home.saxo/legal/disclaimer/saxo-disclaimer)
Full disclaimer (https://www.home.saxo/legal/saxoselect-disclaimer/disclaimer)

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

Contact Saxo

Select region

International
International

Trade responsibly
All trading carries risk. Read more. To help you understand the risks involved we have put together a series of Key Information Documents (KIDs) highlighting the risks and rewards related to each product. Read more

This website can be accessed worldwide however the information on the website is related to Saxo Bank A/S and is not specific to any entity of Saxo Bank Group. All clients will directly engage with Saxo Bank A/S and all client agreements will be entered into with Saxo Bank A/S and thus governed by Danish Law.

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