Morning Brew September 16 2024

Good morning.

On Friday, US Equities were friendly with the Dow +0.7%, the S&P 500 0.5%,the  Nasdaq 0.65%, the S&P and the Nasdaq had the best week since November 2023 at +4% and +6%

Adobe lost 8.5% on a disappointing outlook on Friday, the mega caps did not move dramatically on Friday but had a great week, Nvidia gained more than 15%. Amazon nearly 9% and Tesla more than 9%.

The week will be dominated by central bank decisions with the US clearly the most important one, market expectations are varied. The probability for the US to implement a 25 basis point cut stands at 55%, reflecting a divided sentiment among investors and economists. Meanwhile, the Bank of England shows a 67% probability of maintaining the status quo, with no changes expected in their policy. Over in Asia, the Bank of Japan is predicted to take no action with a 94% probability, signaling a continuation of their current stance.

In light of the higher probability of a 50 basis point cut, the Dollar index fell to 101.10. The yen ended the week at 140.80, GBPUSD at 1.3122, and EURUSD at 1.1075. Silver rose to 30.70, marking an increase of more than 8% for the week. Gold reached its highest weekly close ever after rising nearly 3% over the week. This morning the USD Index is under pressure and falls under 101 to trade 100.85, EURUSD is at 1.11 and Gold and Silver continue their rise to 2590 and 31 – Will the momentum hold?

Charu sees the Fed dovish regardless of the 25 or 50 bps cut.

Ole Comments on the Commitment of Traders Report: Strong weekly commodities rebound with the BCOM TR index up by 2.6% with gains seen across all sectors led by precious metals and softs. Only EU gas trading down. A general supportive risk-on tone, a softer dollar, gold's technical breakout, crude short covering from oversold condition, and signs of recovering metals demand in China all important drivers. 

Chinas Retail Sales disappoint on Saturday making further economic stimulus measures likely while the Biden Administration confirmed that from the end of September it will apply tariffs o f100% on Chinese EVs, 50% on chips, 25% on batteries and steel. This puts China into a very awkward position.

It will be a crucial week for sentiment, trade safely!!

Monday

- Data Italy CPI, EU Trade Balance NY Manufacturing
Tuesday
- Data DE ZEW, US Retail Sales, Canada CPI US Industrial Production
Wednesday
- Data Japan Machine Orders UK CPI, EU HICP US Rate Decision
Thursday
- Data Australia GDP & Unemployment, UK & Turkey Rate decision, US Initial Jobless Rate,
Earnings: Fedex
Friday
- Data Japan CPI, UK Retail Sales, China & Japan Rate decision.

Physically Settled Futures (times GMT)

CLU4 will expire on 20/aug 1830 hrs

KCU4 will expire on 21/aug 1500 hrs

PAU4 will expire on 22/aug 1500 hrs

ZOU4 will expire on 22/aug 1500 hrs

VXQ4 will expire on 21/aug 1300 hrs

CCU4 will expire on 23/aug 1500 hrs

OJU4 will expire on 26/aug 1215 hrs

RCU4 will expire on 23/aug 0900 hrs

Expiring CFDs(times GMT)

COFFEENYSEP24 will expire on 20/aug 1500 hrs

COCOANYSEP24 will expire on 22/aug 1500 hrs

PALLADIUMSEP24 will expire on 21/aug 1500 hrs

NATGASUSSEP24 will expire on 26/aug 1500 hrs