Senior Relationship Manager
Good Morning,
Due to an appointment there will be no Morning Brew tomorrow.
Equities had a decent day overall yesterday while in FX and Commodities we saw a significant risk off more in the wake of the disappointing Chinese data. The Dow gained 0.5%, the S&P 500 0.4%, and the Nasdaq 0.6%.
US Yields fell, nevertheless he USD Index gained to 106.50, EURUSD 1.0155, GBPUSD 1.2037 and USDJPY 133.40. Gold an Silver sold off heavily but could recover slightly off the lows. We are currently at 1780 and 20.15. The Crude Oil contract fell from a high of 94.90 on Friday to a low of 86.85 yesterday on fears of a recession and increasing Saudi production, at the moment we are at 88.70.
A very noteworthy situation is that financial conditions in the US as well as in Europe are actually seen to loosen rather than tighten, meaning that neither the rate hikes by the Fed nor the ECB are currently achieving the goal.
China is supporting private property developers including Longfor Group and CIFI Holdings with loan guarantees
Tencent Holdings plans to sell all or most of its $24 billion stake in food delivery firm Meituan
Walmart and Home Depot earnings will closely watched today and tomorrow Cisco and Tencent are likely to be the most important.
If the bullish sentiment continues in equities, the US500 can test the 200d MA soon and a break above would call for more room to the upside but keep your risk in control.
Economic Data:
Earnings:
Expiries
Physically Settled Futures:
Cocoa (CCU2) will expire 17th Aug at 15:00 GMT.
Expiring CFDs:
COCOANYSEP22 will expire 16th Aug at 15:00 GMT.
OILUSSEP22 will expire 18th Aug at 15:00 GMT.
Bond. Long Bond(s)
With real rates being too positive, we see three scenarios: Opportunity to lock in rates at cycle high, government overreach to keep the economy afloat or a complete reset of the economy.
Steen Jakobsen,
Chief Investment Officer
Is a bond bull market ahead? Inflation still poses a risk for investors, but the moment for increasing duration to your portfolio may be approaching towards the end of the year, when central banks might be forced to cut interest rates.
Althea Spinozzi,
Senior Fixed Income Strategist
The furious rate hike cycle has brought gains in the US dollar, but with stagflation risks in Europe and the UK and weakness in the Chinese economy, USD may have more room to run. But a strong dollar could also have repercussions for US growth, emerging markets and commodity prices.
Charu Chanana,
Market Strategist
With the cost of capital rising painfully, stagflation fears are back, illuminating the fragile state of the green transformation, while giving a tailwind to nuclear power, and threatening the growth of AI-related stocks.
Peter Garnry,
Head of Equity Strategy
With supply tightness not only in energy but all commodities, the momentum in commodity prices may continue, pressuring central banks to lower real rates. That could be a good setup for precious metals, including gold, silver and potentially platinum as well.
Ole S. Hansen,
Head of Commodity Strategy
As the pandemic showed, even the US Treasury can experience seismic shifts. With the government increasing the pace of issuing bonds to support fiscal spending, the complex Treasury market and regulatory constraints could spark a liquidity event.
Redmond Wong,
Market Strategist
The tide has turned for bonds. Given the current yields, bonds have become an attractive investment, with added benefits including lower risk than stocks, increased diversification and a steady stream of income unaffected by economic changes.
Peter Siks,
Investment Coach