Senior Relationship Manager
Summary: Holding pattern ahead of many data points.
Good Morning
Yesterday the US PPI was more in line than the previously published CPI and calmed the market a little.
Stocks closed marginally higher yesterday and rates as well as FX stabilized but risk of increased volatility remains. US 10 Year yields are at 3.43, EURUSD hovers below parity at 0.9960, GBPUSD 1.1510 and USDJPY 143.66. Gold is near support at 1688 and Silver 19.44. Oil remains fairly high at 88.63
With 7 days left to the FOMC Rate decision and 31% probability of a 1% hike, nerves are a bit raw. The USD Index has gained app 15% this year and seems not to stop yet.
Technically Equities as look in a dangerous place.
Energy seems to be on the rise again with Dutch TTF in Focus
The Australian GDP surprised to the upside, at 1.7% vs 1% expected. Japan suffered its biggest single-month trade deficit on record in August
Today the German Wholesale prices will be releases at 8, EU Labor Data, and US Retail Sales and Labor data at 14:30, Vladimir Putin is scheduled to meet Chinas Xi Jinping in Uzbekistan today afternoon.
Tomorrow is the quarterly expiry of Futures and Options, please make sure you are on top of your contracts and don`t lose the exposure you would like due to the expiry.
With rates rising bonds are becoming interesting again – also on main street. There are a number of Investment funds with a focus on fixed income available, trading bonds can be quite technical.
Expiries
Physically Settled Futures:
US Dollar Index - Sep 2022 (DXU2) will expire 16th Sep at 9:00 GMT
GBPUSD - Sep 2022 (BPU2), E-mini EURUSD - Sep 2022 (E7U2), EURUSD - Sep 2022 (ECU2), JPYUSD - Sep 2022 (JYU2), E-micro EURUSD - Sep 2022 (M6EU2), NZDUSD - Sep 2022 (NEU2), EURCHF - Sep 2022 (RFU2), EURGBP - Sep 2022 (RPU2), EURJPY - Sep 2022 (RYU2), SEKUSD - Sep 2022 (SEU2), CHFUSD - Sep 2022 (SFU2) will expire 16th Sep 15:00 GMT
Expiring CFDs:
GER50MIDSEP22 will expire 14th Sep at 8:00 GMT
AUDUSDADSEP22, EURCHFRFSEP22, EURJPYRYSEP22, EURUSDECSEP22, GBPUSDBPSEP22 will expire 14th Sep at 15:00 GMT
USDINDEXSEP22 will expire 15th Sep at 15:00 GMT
US2000SEP22 will expire 16th Sep 8:00 GMT
OILUSOCT22 will expire 16th Sep 15:00 GMT
Thursday, Sep 15
US: Jobless claims (weekly)
US: Retail sales (Aug)
US: Philly Fed manufacturing survey (Sep)
US: Empire State manufacturing survey (Sep)
US: Industrial production (Aug)
US: Business inventories (Jul)
Japan: Trade data (Aug)
Japan: Tertiary industry activity index (Jul)
Australia: Unemployment rate (Aug)
UK: Bank of England decision (Sep)
Eurozone: ECB’s Centeno speaks
Indonesia: Trade data
New Zealand: Real GDP (Q2)
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.