Senior Relationship Manager
Summary: CPI key
Good Morning,
All eyes are on the CPIs today, the Chinese number came a little lower than expected at 2.7% vs 2.9% expected and the German in line with expectations.
At 14:30 the US CPI will be released and will provide insight on the future rate path in the US: Currently a 75 bps hike remails priced in at 68%. The Consumer Price Index is seen to have risen 0.2% last month after advancing 1.3% in June, the annual rate is expected at 6.1% seasonally adjusted.
Tech shares came under pressure as Micron Technology cut it`s outlook, Intel fell more than 2%, AMD 4.5% and Nvidia 4%. The demand for PC and Cell Phones is seen to slow.
The FX Markets are fairly quiet going in to the CPI, Gold and Silver give up a little ground after the strong rise to trade at1790 and 20.38 . EURUSD 1.0213 and GBPUSD at 1.2070. USDJPY holds near the 135 and Implied vol is at 9%. For the 1 month atm EURUSD.
Rates edge minutely higher to 2.80 for the 10 and 3.27 for the 2 year.
Elon Musk sold app. 7 billion worth of Tesla to finance a potential Twitter deal
Peter Garnry wrote a very good piece on risk management and the advantage of adding an ETF to the portfolio
Besides the CPI, Taiwan, Ukraine and US Politics remain important items but no key developments are expected today.
Expiries
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