Quarterly Outlook
Fixed Income Outlook: Bonds Hit Reset. A New Equilibrium Emerges
Althea Spinozzi
Head of Fixed Income Strategy
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Morning Brew April 8 2024
Erik Schafhauser
Senior Relationship Manager
Summary: Will Gold hit 2500 or 2200 first?
Good morning,
We saw an interesting end of the week as the non-farm payroll exceeded all expectations and there was no major revision. As was to be expected, yields rose to the highest level this year to currently trade at 4.43 (10 Year). The USD index rose moderately to 104.34 but equities and precious metals and Bitcoin were strong against the odds.
The Dow gained 0.8%, the S&P 500 1.1% and the Nasdaq 1.2%. For the Week, the Indexes were down with the Dow at -2.3%, the S&P 500 -1% and the Nasdaq 0.8%. Nvidia gained 2.45% to close at 880 but it fell for the 2nd week in row after the stellar series of 11 consecutive weekly gains. Tesla fell on news there may not be an entry level EV. Boeing made negative headlines again as a 737 lost an engine cover Overall volumes were quite small at 10.1 bio shares.
Gold is trading at 2333 and Silver rose to 27.70, in the night it briefly hit 28. China announced a further month of purchase and has purchased more the 70 million ounces of the precious metal in the last 17 months. At a price of 2000 that is the equivalent of 140 Billion USD of purchases. Gold is more than 17% off the lows, at one point there must be a pause in this move – the question is just when. If you have enjoyed the ride, maybe think about protecting your gains.
This week we are watching a lot of important matters:
Janet Yellen is still in China addressing among other topics over capacity in industrial production while the Chinese Minister of Commerce is visiting Europe.
In the Middle East, All Jazeera reports progress in the truce talks while many news outlets warn there may be an Iranian retaliation against Israel imminent.
We have a good deal of data in the 2nd half of the week but several speakers before that. Key items ont eh agenda are the US CPI and the Fed Minutes on Wednesday and the ECB Rate decision as well as the US PPI on Thursday
Key Events:
Monday
- Data De Industrial Output, Israel Rate decision, Yellen speaks,
Tuesday
- Data Neil Kashkari speaks at 01:00
Wednesday
- Data AU Rate decision, US CPI, Golsbee speaks, Fed minuts,
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.
Trade safely!
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