It's a quietish start to the week but there’s still plenty to keep an eye on including Turkish CPI, Eurozone PPI, and factory orders and durable goods orders from the US. These latter prints come on the heels of solid payrolls data on Friday, including a 2.6% gain in average hourly earnings. However, despite these robust numbers, the US dollar rally started to fade as resurgent risk appetite put it on the back foot, reports John J Hardy, Saxo’s Head of Forex Strategy.
The Australian dollar faces a heavy data calendar this week, most importantly, the Reserve Bank of Australia meeting at 04:30 GMT Tuesday, though the market consensus doesn’t expect a rate hike until next year.
In equities, risk appetite is back, and European bourses have opened in positive territory, following the lead from Asian gains overnight, says Peter Garnry, Saxo’s Head of Equity Strategy. That said, some risks still lurk in the background including the US trade war and creaky emerging markets.
Finally today, in commodities, Ole Hansen, Saxo’s head of Commodity Strategy, says that gold’s resolve is likely to be challenged ahead of the June 13 Federal Open Market Committee meeting as Friday’s strong job report all but confirmed that another rate hike is coming.
WTI crude oil is challenging support at $65.50/barrel and has retraced half of the February–May rally, with the drivers including expectations that Opec and Russia will soon increase output.
Q4 Outlook 2022: Winter is coming
- Winter is coming to the financial markets as central banks are tightening their grip. How spring will look is still a question.
European energy crisis: it will get worse before it gets betterThe winter in Europe will be tough, but whether the result is political chaos or sustainable, innovative solutions is still undecided.
A difficult and volatile quarter awaitsAs the year draws to an end, commodities continue to be at centre stage of the world with growth pockets political uncertainty.
The bright side: crises drive innovationThe positive spin on crises is that they come with solutions. It is worrisome that deglobalisation may be a response to this crisis.
Green transformation in China: renewable energy and beyondGoing green, China needs to span numerous energy sources to ensure stability, as every source comes with a challenge.
Asia: Intermittent solutions, but a faster renewable adoption curveAsian energy supply is being squeezed. This and the adoption of renewables may change the investment sentiment in the region.
FX: A Fed thaw needed to deliver a sustained USD turn lowerThe US Dollar can keep momentum when the Federal Reserve continues to tighten, leaving the rest to play to their drum.
Autumn can become ugly for equities and bond holders. Comfort for Dollar longsTechnical analysis suggests that equities could face a tough Q4 as could fixed income. US Dollar positions could provide some upside.
The next stock market sector to watch, with stocks going nuclearAs the world scrambles to find affordable, sustainable energy, nuclear is getting attention from politicians and investors alike.
The crypto space is getting cold when the hype disappearsCryptocurrencies face a winter of their own as retail investors and governments are asking tough questions.