Key Stories from the past week: Markets rebound as the US Dollar weakens Key Stories from the past week: Markets rebound as the US Dollar weakens Key Stories from the past week: Markets rebound as the US Dollar weakens

Key Stories from the past week: Markets rebound as the US Dollar weakens

Macro
Saxo

The US presidential debate seemed to give Kamala Harris an edge over Donald Trump in prediction markets, further adding to the election induced volatility which appears in part to have driven further JPY and Gold upside. US CPI came in mostly in-line with expectations except a slightly hotter MoM core CPI – markets now look towards the FED cut next week and whether it will follow suit of a 25bps cut like ECB this week, or perhaps a 50bps cut which is speculated to be on the table. See this week's key stories from the desk below:

FED rate cut decision too close to call
US Treasuries advanced by the end of the week with investors still divided on the size of Fed’s first rate cut which is anticipated next Wednesday, 18th Sept 2024. On Thursday the September Fed-OIS sold off slightly, increasing the chances of a half-point rate cut after Wall Street Journal and FT reports indicated policymakers were debating between a 25bp or 50bp cut. By Friday the 10-year yield trading lower to around 3.63% while the important 2-year yield fell by 4 basis points, hovering just above 3.55%, the 2023 low.
The Fed's rate cut dilemma: Start big or small?

Several factors add to bullish case for gold
Gold (XAUUSD) reached a fresh record high of about USD 2,571 per ounce, as it continued to build on the breakout above 2,530 - a level that finally gave way after the ECB cut rates along with speculation about a potential 50bps FED cut still being on the table next week. Saxo clients remain primarily long, with 59% long XAUUSD and 71% long Gold – October futures, however in the past week ratio of long positions decreased about 5.5%. Several factors contribute to a bullish case for gold as a hard asset.
US Election: will gold win in all scenarios?

Yen continues to gain vs US dollar
The broad-focused Bloomberg Dollar Index fell for a second consecutive week dropping around 0.4%, primarily driven by MXN, JPY, and AUD strength. The Japanese yen eased to around 142.5 per USD midweek as the US dollar strengthened on mixed inflation data but by Friday the pair had fallen to its lowest level in 14 months, with BOJ officials indicating plans to steadily hike rates to achieve a 2% inflation target.
Yen upside fuelled by BOJ hawkishness and election volatility

The tech trade is still intact
Equities staged a solid rebound with a strong performance for in focus AI-related investment as OpenAI announced their newest reasoning model called o1 which can solve harder problems than previous models. The VanEck semiconductor index rose +7% on the week, Nvidia rebounded +16%. Oracle shares reached a record high on a bumper AI-fuelled forecast. Adobe fell as the outlook disappointed.
Stocks on the move: Adobe and Oracle

Next week’s main event will be the Federal Reserve policy meeting (Weds). There are also other central bank policy announcements from The Bank of England and Norges Bank (Thurs) and The Bank of Japan (Friday). US Retail Sales (Tues) may alight further slowdown fears and Jobless claims (Thurs) will also be keenly watched. Chinese markets are closed of Mid-Autumn festival on Monday and Tuesday.


Quarterly Outlook 2024 Q3

Sandcastle economics

01 / 05

  • Macro: Sandcastle economics

    Invest wisely in Q3 2024: Discover SaxoStrats' insights on navigating a stable yet fragile global economy.

    Read article
  • Bonds: What to do until inflation stabilises

    Discover strategies for managing bonds as US and European yields remain rangebound due to uncertain inflation and evolving monetary policies.

    Read article
  • Equities: Are we blowing bubbles again

    Explore key trends and opportunities in European equities and electrification theme as market dynamics echo 2021's rally.

    Read article
  • FX: Risk-on currencies to surge against havens

    Explore the outlook for USD, AUD, NZD, and EM carry trades as risk-on currencies are set to outperform in Q3 2024.

    Read article
  • Commodities: Energy and grains in focus as metals pause

    Energy and grains to shine as metals pause. Discover key trends and market drivers for commodities in Q3 2024.

    Read article

Disclaimer

The Saxo Bank Group entities each provide execution-only service and access to Analysis permitting a person to view and/or use content available on or via the website. This content is not intended to and does not change or expand on the execution-only service. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Rules of Engagement and (v) Notices applying to Saxo News & Research and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Bank Group by which access to Saxo News & Research is gained. Such content is therefore provided as no more than information. In particular no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Bank Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Bank Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on Saxo News & Research or as a result of the use of the Saxo News & Research. Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Bank Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. Saxo News & Research does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of our trading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication under relevant laws.

Please read our disclaimers:
Notification on Non-Independent Investment Research (https://www.home.saxo/legal/niird/notification)
Full disclaimer (https://www.home.saxo/legal/disclaimer/saxo-disclaimer)
Full disclaimer (https://www.home.saxo/legal/saxoselect-disclaimer/disclaimer)

Saxo Bank (Schweiz) AG
The Circle 38
CH-8058
Zürich-Flughafen
Switzerland

Contact Saxo

Select region

Switzerland
Switzerland

All trading carries risk. Losses can exceed deposits on margin products. You should consider whether you understand how our products work and whether you can afford to take the high risk of losing your money. To help you understand the risks involved we have put together a general Risk Warning series of Key Information Documents (KIDs) highlighting the risks and rewards related to each product. The KIDs can be accessed within the trading platform. Please note that the full prospectus can be obtained free of charge from Saxo Bank (Switzerland) Ltd. or the issuer.

This website can be accessed worldwide however the information on the website is related to Saxo Bank (Switzerland) Ltd. All clients will directly engage with Saxo Bank (Switzerland) Ltd. and all client agreements will be entered into with Saxo Bank (Switzerland) Ltd. and thus governed by Swiss Law. 

The content of this website represents marketing material and has not been notified or submitted to any supervisory authority.

If you contact Saxo Bank (Switzerland) Ltd. or visit this website, you acknowledge and agree that any data that you transmit to Saxo Bank (Switzerland) Ltd., either through this website, by telephone or by any other means of communication (e.g. e-mail), may be collected or recorded and transferred to other Saxo Bank Group companies or third parties in Switzerland or abroad and may be stored or otherwise processed by them or Saxo Bank (Switzerland) Ltd. You release Saxo Bank (Switzerland) Ltd. from its obligations under Swiss banking and securities dealer secrecies and, to the extent permitted by law, data protection laws as well as other laws and obligations to protect privacy. Saxo Bank (Switzerland) Ltd. has implemented appropriate technical and organizational measures to protect data from unauthorized processing and disclosure and applies appropriate safeguards to guarantee adequate protection of such data.

Apple, iPad and iPhone are trademarks of Apple Inc., registered in the U.S. and other countries. App Store is a service mark of Apple Inc.