Technical Analyst, Saxo Bank
AEX 25 is choppy around the 0.618 retracement and seems to be range bound in a tight range between 664 and 680. Break out is needed for direction. However, the trend is down and a breakout to the upside is likely to be short-lived possibly up to around 700 before downtrend is likely to resume.
If breaking out to the downside AEX is set for a test of the June lows at around 632 with support at around 655.
BEL20 spiked down to the support at 3,506 now hovering around 3,562. If the Index closes above 3,619, we could see a rebound to around 3,722 before downtrend is likely to resume.
If BEL20 closes below 3,562 there is no strong support before around 3,235 close to the 0.618 retracement of the Covid scare lows at 2,406 to 2021 peak.
However, the Index which is trading around the 0.618 retracement of the Q4 2020 correction trough to 2021 peak and could find some support at the 0.764 retracement at 3,332.
CAC40 is bouncing from key support at around 6,031. A bounce that could take the leading French Index to 6,200-6,300. However, the trend is down and will remain down despite a possible bounce to 6,300. A down trend that is likely to take CAC down to test the July lows at around 5,786.
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.