Erik Schafhauser Zürich

Morning Brew April 10 2024

Morning Brew 1 minute to read
Erik Schafhauser

Senior Relationship Manager

Summary:  CPI and nothing else matters


Good morning,

Heading into the most important day of the week, there are lots of news but so far little action.

Gold and Silver remain near the top, yields decline slightly, stocks gain moderately, and all eyes seem to be on the CPI release for clear guidance.

The CPI is expected at 3.4% annually with a span from 3.2% and 3.5% from 50 analysts, the core is expected at 3.7% with high and low estimate at 3.6% and 3.8%.

While the PCE is normally the number the Federal Reserve heeds more, the consumer Price Index finds more attention in the media and may in the short term cause a stronger reaction accordingly.

A higher number would likely cause a risk-off move with Equities higher, Bonds lower, Yields higher and the USD stronger. Precious Metals Traders are expecting the number to either cause a continuation of the upward move or as a reason for the maybe long due correction.

The RSI for Gold as well as Silver is well above 70, indicating we are overbought and call if not for a correction at least a sideways period to normalize the move. At the same time, the strength in the precious metals is getting more and more attention and may well draw in buyers. Gold is currently at 2358 and Silver 28.15.

With the US CPI and the Fed Minutes later today and the ECB tomorrow, EURUSD may well be worth a look. We have been going nowhere for a while now and the implied volatility is at 5.6%, well below the longer-term average at 6.4%. We are trading at 1.0850 and any shift in the rate outlook should cause moves.

GBPUSD is at 1.2680 and USDJPY 151.80. The USD Index is holding above 104 at 104.15.

Bitcoin retreated off the 70 again to 69.300 and Ethereum is at 3542.

The US500 is trading at 5215, the US 30 38920 and the US Tech 100 NAS and the GER 40 both near 18200.  Crypto shares fell and Moderna rose after announcing that their cancer vaccination may show promise.

Today, as said, all focus will be on the CPI but bear in mind that the Fed Minutes may also be important if there are any surprises.

Consider how much risk you want to carry into he numbers if you are a trader, there is a decent risk of sharp moves on any surprise – we have commonly seen a delayed strong reaction that last few months as well.

Trade safely!

Wednesday
- Data AU Rate decision, US CPI, Golsbee speaks, Fed minutes,

Thursday
- Data China M2, CPI and PPI, ECB Rate, US Initial Jobless Claims, PPI, Feds Collins, and Bostic speaks.

Friday
- Data China Trade Balance, DE&SWE&FR CPI, US Import Prices Bostic and Daly speak.
- Earnings: Blackrock, JP Morgan, Wells Fargo, State Street, Citigroup

 

Quarterly Outlook

01 /

  • Upending the global order at blinding speed

    Quarterly Outlook

    Upending the global order at blinding speed

    John J. Hardy

    Global Head of Macro Strategy

    We are witnessing a once-in-a-lifetime shredding of the global order. As the new order takes shape, ...
  • Equity outlook: The high cost of global fragmentation for US portfolios

    Quarterly Outlook

    Equity outlook: The high cost of global fragmentation for US portfolios

    Charu Chanana

    Chief Investment Strategist

  • Asset allocation outlook: From Magnificent 7 to Magnificent 2,645—diversification matters, now more than ever

    Quarterly Outlook

    Asset allocation outlook: From Magnificent 7 to Magnificent 2,645—diversification matters, now more than ever

    Jacob Falkencrone

    Global Head of Investment Strategy

  • Commodity Outlook: Commodities rally despite global uncertainty

    Quarterly Outlook

    Commodity Outlook: Commodities rally despite global uncertainty

    Ole Hansen

    Head of Commodity Strategy

  • Macro outlook: Trump 2.0: Can the US have its cake and eat it, too?

    Quarterly Outlook

    Macro outlook: Trump 2.0: Can the US have its cake and eat it, too?

    John J. Hardy

    Global Head of Macro Strategy

  • Equity Outlook: The ride just got rougher

    Quarterly Outlook

    Equity Outlook: The ride just got rougher

    Charu Chanana

    Chief Investment Strategist

  • China Outlook: The choice between retaliation or de-escalation

    Quarterly Outlook

    China Outlook: The choice between retaliation or de-escalation

    Charu Chanana

    Chief Investment Strategist

  • Commodity Outlook: A bumpy road ahead calls for diversification

    Quarterly Outlook

    Commodity Outlook: A bumpy road ahead calls for diversification

    Ole Hansen

    Head of Commodity Strategy

  • FX outlook: Tariffs drive USD strength, until...?

    Quarterly Outlook

    FX outlook: Tariffs drive USD strength, until...?

    John J. Hardy

    Global Head of Macro Strategy

  • Fixed Income Outlook: Bonds Hit Reset. A New Equilibrium Emerges

    Quarterly Outlook

    Fixed Income Outlook: Bonds Hit Reset. A New Equilibrium Emerges

    Althea Spinozzi

    Head of Fixed Income Strategy

The information on or via the website is provided to you by Saxo Bank (Switzerland) Ltd. (“Saxo Bank”) for educational and information purposes only. The information should not be construed as an offer or recommendation to enter into any transaction or any particular service, nor should the contents be construed as advice of any other kind, for example of a tax or legal nature.

All trading carries risk. Loses 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.

Saxo Bank does not guarantee the accuracy, completeness, or usefulness of any information provided and shall not be responsible for any errors or omissions or for any losses or damages resulting from the use of such information.

The content of this website represents marketing material and is not the result of financial analysis or research. It has therefore has not been prepared in accordance with directives designed to promote the independence of financial/investment research and is not subject to any prohibition on dealing ahead of the dissemination of financial/investment research.

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.