Erik Schafhauser Zürich

Morning Brew September 26 2023

Morning Brew 1 minute to read
Erik
Erik Schafhauser

Senior Relationship Manager

Good Morning

In 2014 a severe Euro weakness caused the Dollar Index to gain 11 weeks in a row, that was the only instance in history that happened – it looks like it could happen again on the current yield driven strength of the USD.

Fairly hawkish comments by the Feds Kashkari and Goolsbee pushed the long end of the curve higher and the USD followed. The USD Index rose to above 1.06 as the 10 year Yield hit 4.54. EURUSD Fell to below 1.06 to 1.0580, GBPUSD is trading just below 1.22 and USDJPY is testing the 1.09. Gold and Silver fell to 1915 and 22.90.

Our Charu comments: King dollar remains heavily in demand, being the only relief in portfolios with both equities and bonds down. Momentum is likely to continue until US economic data or events signal risks to spending into Q4. We highlight the "Three S" risks stacking up into next week coming from student loan repayments, strikes and shutdown. These could make Gold outperform, but any hit to the USD will remain temporary for now. EUR and JPY face a double whammy of risks from USD strength and rising oil prices, while CAD outperformance continues.

US Shares gained yesterday and Indexes closed green, the Dow +0.13%, the US 500 0.4% and the Nasdaq +0.45%. Over night, the gains have been already given up and the US 500 is trading at 4322, the US tech 100 NAS at 14707, the GER40 15380. In perspective, the  S&P 500 is down app 5.5% since late July but remains up about 13% for 2023. Volumes remain low as traders are looking for clues at 9 billion, yesterdays volume is app 1 billion below the 20 day average..  Our Kim Cramer took a look at key technical of US tech stocks here

The Debt ceiling remains in focus as Moody's warns US government shutdown bad for country's credit and negotiations about a stopgap remain nervous.

China Evergrande remains under pressure, dropping as much as 8% after a unit of the embattled property developer missed an onshore bond repayment.

Trade carefully!

Upcoming Events:

Tuesday
- Data: Japan PPI, US Consumer Confidence, New Home Sales
Wednesday
- Data US Durable Goods,
Thursday
- Data Australia Retail Sales, EU Consumer Confidence, DE CPI, US GDP, Initial Jobless Claims,

Friday
- Data Japan CPI, UK GDP, Swiss KOF; DE unemployment, EU HICP, US PCE, University of Michigan

Expiries

Physically Settled Futures

  • NGV3 will expire 26 Sep 2023 at 07:30 GMT
  • TTFMV3 will expire 27 Sep 2023 at 09:00 GMT

    Expiring CFDs

  • CHINA50SEP23 will expire 27 Sep 2023 at 02:00 GMT
  • GASOLINEUSOCT23 will expire 27 Sep 2023 at 15:00 GMT
  • GOLDOCT23 will expire 27 Sep 2023 at 15:00 GMT
  • HEATINGOILOCT23 will expire 27 Sep 2023 at 15:00 GMT
  • SOYBEANMEALOCT23 will expire 27 Sep 2023 at 15:00 GMT
  • SOYBEANOILOCT23 will expire 27 Sep 2023 at 15:00 GMT
  • SUGARNYOCT23 will expire 27 Sep 2023 at 15:00 GMT
  • TAIWAN95SEP23 will expire 27 Sep 2023 at 02:00 GMT
  • HK50SEP23 will expire 28 Sep 2023 at 02:00 GMT
  • SINGAPORESEP23 will expire 28 Sep 2023 at 02:00 GMT

Erik

 

Quarterly Outlook

01 /

  • Fixed Income Outlook: Bonds Hit Reset. A New Equilibrium Emerges

    Quarterly Outlook

    Fixed Income Outlook: Bonds Hit Reset. A New Equilibrium Emerges

    Althea Spinozzi

    Head of Fixed Income Strategy

  • Equity Outlook: Will lower rates lift all boats in equities?

    Quarterly Outlook

    Equity Outlook: Will lower rates lift all boats in equities?

    Peter Garnry

    Chief Investment Strategist

    After a period of historically high equity index concentration driven by the 'Magnificent Seven' sto...
  • FX Outlook: USD in limbo amid political and policy jitters

    Quarterly Outlook

    FX Outlook: USD in limbo amid political and policy jitters

    Charu Chanana

    Chief Investment Strategist

    As we enter the final quarter of 2024, currency markets are set for heightened turbulence due to US ...
  • Macro Outlook: The US rate cut cycle has begun

    Quarterly Outlook

    Macro Outlook: The US rate cut cycle has begun

    Peter Garnry

    Chief Investment Strategist

    The Fed started the US rate cut cycle in Q3 and in this macro outlook we will explore how the rate c...
  • Commodity Outlook: Gold and silver continue to shine bright

    Quarterly Outlook

    Commodity Outlook: Gold and silver continue to shine bright

    Ole Hansen

    Head of Commodity Strategy

  • FX: Risk-on currencies to surge against havens

    Quarterly Outlook

    FX: Risk-on currencies to surge against havens

    Charu Chanana

    Chief Investment Strategist

    Explore the outlook for USD, AUD, NZD, and EM carry trades as risk-on currencies are set to outperfo...
  • Equities: Are we blowing bubbles again

    Quarterly Outlook

    Equities: Are we blowing bubbles again

    Peter Garnry

    Chief Investment Strategist

    Explore key trends and opportunities in European equities and electrification theme as market dynami...
  • Macro: Sandcastle economics

    Quarterly Outlook

    Macro: Sandcastle economics

    Peter Garnry

    Chief Investment Strategist

    Explore the "two-lane economy," European equities, energy commodities, and the impact of US fiscal p...
  • Bonds: What to do until inflation stabilises

    Quarterly Outlook

    Bonds: What to do until inflation stabilises

    Althea Spinozzi

    Head of Fixed Income Strategy

    Discover strategies for managing bonds as US and European yields remain rangebound due to uncertain ...
  • Commodities: Energy and grains in focus as metals pause

    Quarterly Outlook

    Commodities: Energy and grains in focus as metals pause

    Ole Hansen

    Head of Commodity Strategy

    Energy and grains to shine as metals pause. Discover key trends and market drivers for commodities i...

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)

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.