Senior Relationship Manager
Summary: Risk off again - weak Q3 except USD
Good Morning
This is my last morning brew for the next three weeks as I will be travelling in Asia. Please use our global Markets call to stay up to date: https://www.home.saxo/insights/news-and-research/podcast
Equities traded lower yesterday, mainly driven by better than expected employment data which reiterates the “higher rates for longer” theme and raises the fear of secondary effects.
Germanys inflation rose to double digits at the same time as the government announced a ceiling on gas costs that will cost €200 bio.
UK just reported better than expected GDP at 4.4% vs an expectation of 2.9%
Russian will hold a ceremony to annex the four regions of Ukraine
So far this quarter the USD Index has gained 7.6%, GBPUSD has lost 11.5% and oil and Gold has lost 22.2% and 8.6%.
The US 500 is down 3.8% in Q3 and 22.6 YTD, the Nasdaq 2.6% and 31% and the Dax 6.3% and 34%.
Today watch out for the US PMI and the EU Inflation data.
Trade carefully and have your risk firm in control via stops, options or a controlled long term strategy.
US: PCE & Core PCE (Aug)
US: Chicago PMI (Sep)
US: U of Michigan Consumer Sentiment (Sep, final)
US: U of Michigan 5-10-year Inflation Expectations (Sep, final)
Japan: Unemployment Rate (Aug)
Japan: Industrial Production (Aug)
Japan: Retail Sales (Aug)
Japan: Housing Starts (Aug)
Japan: Consumer Confidence Index (Sep)
China: NBS Manufacturing & Non-manufacturing PMIs (Sep)
China: Caixin China Manufacturing PMI (Sep)
HK: Retail Sales (Aug)
India: RBI Policy Meeting (Sep)
UK: GDP (Q2, 2nd)
France: HICP (Sep, flash)
Germany: Unemployment (Sep)
Eurozone: HICP (Sep, flash)
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.