Saxo Bank head of equity strategy Peter Garnry is bullish the three big banks – JPMorgan, Wells Fargo, and Citi – reporting earnings ahead of today's US open. Citing expectations for strong trading income and commercial banking results, Garnry says that he could see equities rally throughout the earning season provided the negative macro surprise trend eases and there are no major new provocations on the political (read: President Trump) front.
In single shares, Garnry reports that British Airways parent IAG has taken a 4.6% stake in low-cost carrier Norwegian, boosting shares of the latter by 46% on speculation of an acquisition (IAG already owns low-cost carrier Vueling, as well as Aer Lingus and Iberia).
Saxo's equities head says that he fails to see the big synergies here and is surprised by the timing of the IAG bid.
In the FX space, Saxo Bank head of forex strategy John Hardy reports that EURGBP is in focus on what appears to be a major flow/technicals-driven drop below key support around 0.87, with Thursday's close around 0.8660 having the potential to open up room for a more protracted fall towards major support around 0.8300-0.8325.
They key upcoming factors here, Hardy says, are next week's UK data releases, which include producer prices and inflation prints on April 18.
Hardy also notes the yen's continued weakness with USDJPY pushing on resistance at 107.50 for a potential re-entry into the Ichimoku cloud above 108.00. In his view, the USDJPY rally does not yet look to be particularly dramatic but could extend if the current swell in risk appetite – due partially to President Trump's unexpected reversal on the Trans-Pacific Trade partnership – continues in the short- to medium-term.
Outrageous Predictions 2023: The War Economy
- The constantly growing global need for energy drives the world's richest to huddle up and launch a R&D project in a size the world hasn't seen since the Manhattan Project gave the US the first atomic bomb.
French President Macron resignsThe political stalemate in France and the rise of Marie Le Pen following the 2022 elections corners President Macron, forcing him to give up on politics and resign from his position. At least for now.
Gold rockets to USD 3,000 as central banks fail on inflation mandateAs markets and central banks realise that the idea that inflation is transitory is wrong, and that prices will remain higher for longer, gold is sent through the roof, hitting a price tag of USD 3,000
EU Army forces EU down path to full unionWith continued challenges in the region and a US military that isn't aggressively enacting its former role as global policeman, the European Union agrees to create its own armed forces, bringing the whole region closer.
A country agrees to ban all meat production by 2030In an effort to become one of the global leaders on the path to net-zero emissions, one country decides to not only put a heavy tax on meat, but to ban domestic production entirely.
UK holds UnBrexit referendumFollowing a recession and domestic pressure, the United Kingdom is thrown into political turmoil that will end with a vote to wind back Brexit.
Widespread price controls are introduced to cap official inflationHistory tells us that with the war economy comes rationing and price controls. And this time is no different, as policymakers introduce strict price controls that lead to a range of unintended consequences.
OPEC+ & Chindia walk out of the IMF, agree to trade with new reserve assetSanctions against Russia have caused widespread turmoil due to US Dollar moves in countries across the globe that don't consider the US an ally. To relieve themselves from this, they leave the IMF and create a new reserve asset.
USDJPY fixed to the USD at 200 as Japan overhauls financial systemFollowing the challenges that faced the Japanese Yen in 2022, the Bank of Japan attempts to keep the currency from sliding. Unsuccessful on the long-term, Japan will launch a reset of its entire financial system.
Tax haven ban kills private equityWith the war economy comes an increased focus on national interests and sovereign nations' ability to assert themselves. In that regard, the OECD countries turn their attention on tax havens and pull the big guns out, banning them altogether.