Erik Schafhauser Zürich Erik Schafhauser Zürich Erik Schafhauser Zürich

Morning Brew July 27 2021

Morning Brew 1 minute to read
Erik
Erik Schafhauser

Senior Relationship Manager

Summary:  Calming down or the Quiet before the storm?


Good Morning

Markets traded very nervously yesterday and volatility spiked across the board – from equities to FX and risk was sold off. Into the US Close we saw buyers come in and overnight, Index futures can recover. This could imply that the sell off is widely interpreted as an opportunity to buy the dip rather than as a longer term sell off.

Near term the main three causes for nervousness are

  • Evergran4293 in the future before de with two coupon payments due Thursday. If they are not payed within 30 days, the company would be in default on USD 300 bio of debt. The Chairman and largest shareholder issued an optimistic statement while the Chinese Government was rather quiet, it seems doubtful that after the recent policy moves to put pressure on prominent entrepreneurs, that there will be an effort unless the economy really needs it desperately.
  • The FOMC rate decision tomorrow where traders are hoping for a delay in tapering and the continuance of the status quo and any clear announcement of near term tapering would be the surprise.  
  • The US debt ceiling where an agreement needs to be reached before month end to increase the debt ceiling and the stances between democrats and republicans seem to be fairly apart.

US indexes closed sharply lower , the Dow lost 1.8%, the S&P 500 1.7%, and the Nasdaq 2.2% the lows had been app a full % lower. The S&P fell to 4293 before rising to a close of 4348. The USD Climbed to 93.48 before receding to 93.17, EURUSD tested the 1.1700 now 1.1732 cable traded as low as 1.3640 now 1.3670. Interestingly Gold and Silver were quite stable – it seems they had preempted the move on Friday.  Gold is trading at 1762 and seems to have found decent buyers in the 1750-60 area.

Bitcoin fell to 40k before rising to the important 43000 level.

Lufthansa is looking to raise €2 bio to rid itself of most sstate ownership.-  

The United States will reopen to air travelers from 33 countries including China, India, Brazil and most of Europe in November .

Trade safely and watch for nervousness. 

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.