Saxo Bank
Good Morning
Markets were trading extremely nervous yesterday with Bitcoin falling to below 30000 before recovering. Dax broke to below 15000 the Dow to 33500 and the Nasdaq 13000. Currently we are off the lows again, Dax is trading at 15210. The USD Index recovers to 90.30 with EURUSD falls to 1.2180 gold held up very well while Silver fell to below 28 USD again.
Driver of the move was mainly uncertainty on the broader direction of central banks and overall sentiment.
Inflation is rising and there are expectations of looming tapering of supportive measures, on the other hand risk sentiment remains strong and the US Infrasructure programs are supporting equities. The fed Minutes yesterday indictated that if the economy continued to make rapid progress toward the (policy-setting) Committee’s goals, it might be appropriate at some point in upcoming meetings to begin discussing a plan for adjusting the pace of asset purchases.
Today, watch for the US Data at 14:30 CET with Initial Jobless claims expected at 450k. Tomorrw we are expecting international CPIs..
Other Headlines:
Japan's exports grew the most since 2010 up 38% Month on Month
Zhang Yiming, founder of TikTok owner ByteDance, will step down as chief executive
The Biden administration will waive sanctions on the company behind Russia's Nord Stream 2 gas pipeline
AI: The good, the bad, and the bubble
While a deep recession may not be iminent thanks to central bank policy, interest rates will have to stay high for longer, and this will be accompanied by volatility risk from the unwinding of bubbles, especially within AI.
Steen Jakobsen,
Chief Investment Officer
The emergence of advanced AI systems is by far the most surprising event this year, turning everything upside down, while risks and benefits are debated. AI will also become an arms race between the US and China.
Peter Garnry,
Head of Equity Strategy
As China navigates global fragmentation, its cycle of technology application, productivity enhancement, and growth is threatened by US breakthroughs in generative AI, limited computing power, and geopolitical tensions.
Redmond Wong,
Market Strategist
Japan’s expertise in semiconductors and robotic integration could be the foundation of AI dominance. Combining two of this year's themes, Japanese equities and artificial intelligence, brings a wave of opportunities.
Charu Chanana,
Market Strategist
The AI fever has turned the technology into a darling, pushing crypto further into no-man’s-land. There are striking similarities between AI and crypto, and if these are to come full circle, AI won't be spared for bubbles.
Mads Eberhardt,
Cryptocurrency Analyst
Stocks related to artificial intelligence (AI) have appeared on investors' radars. Expectations are high, but it may be necessary to consider how to get exposure to AI in a diversified way.
Hans Oudshoorn,
Trainer Academy
The USD is on its back foot as markets celebrate an eventual Fed rate peak and steady long US yields. The stakes are even higher for the Japanese yen if longer major sovereign yield curves have to price in economic acceleration.
John J. Hardy,
Head of FX Strategy
While commodities, broadly speaking, have faced some tough months, a partial reversal during June could signal that the asset class is getting back on its feet with energy holding up and precious metals with upside potential.
Ole S. Hansen,
Head of Commodity Strategy
As inflation remains high central banks face hard decisions about whether they should keep hiking interest rates or stop. Meanwhile, the rise of AI creates bubble-like conditions that only make the decision harder.
Althea Spinozzi,
Senior Fixed Income Strategist