Senior Relationship Manager
Summary: USD Soars, EUR, GBP and PM Weak While Stocks are Undecided
Good Morning,
Markets are getting really interesting into the end of the quarter. The debt ceiling remains unresolved into the last hour, USD Rates are rising, driving the USD higher while equities are holding their breath and hardly moving.
The Dow Jones gained 0.26%, the S&P 500 0.16% and the Nasdaq gives up a little ground with 0.24%. Over night, Indexes are friendly with the Dax future gaining to 15417 and the Eurostoxx to 4085, both up 0.5%. Chinese Equities suffered their worst quarter in 20 years.
10 Year Rates trade at 1.52% and the USD Index has broken above the 94 and is trading at the highest level this year. The biggest constituents of the USD Index, the EUR as well as the GBP both lost. Cable trades at 1.3444, EURUSD at 1.16 and Gold and Silver lost ground to trade at 1732 and 21.50. While the USD is generally supported by the Feds outlook, the EUR and the GBP are hurt by supply issues, rising energy costs and a dovish ECB. The GBP lost more than 2% in two days.
EURUSD is trading right at support at 1.16, if broken the next significant level is 1.1520/15
Chinese manufacturing actually declined in September largely driven by electricity shortages.
Today the EU unemployment rate at 11 and the US Data with GDP and Initial jobless claims at 14:30 will be key along with the US debt ceiling and any development around Evergrande will drive the markets, it is also month and quarter end.
From Tomorrow I will be on holiday for two weeks chasing sloths with my little monsters
Safe Trading
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.