Morning Brew July 27 2021

Good Morning,

We are seeing a curious development since yesterday where rising yields are not causing the USD to increase in value further. The USD Index is at 103.17 while the 10 year yields rose to 4.34 – the highest since 2007.

Stocks are also trading friendlier than one would expect, the Dow lost 0.1% but the S&P 500 and the Nasdaq gain 1.6%. Nvidia gained 8.5%& as HSBC raised the forecast to 780 – with earnings up tomorrow, the stock is clearly worth watching – can they deliver what the AI boom promises?

S&P Global on Monday cut credit ratings and revised its outlook for multiple U.S. Banks.

Peter Garnry took a look at China: The prevailing narrative on China is that its economic model is broken and the government is not doing enough to stimulate the economy, but balance sheet growth among Chinese banks shows that overall credit growth is the highest since Q1 2012

EURUSD broke above the 1.09 figure, Cable is 1.2780 and USDJPY 146. Gold and Silver found some resilience and are trading at 1897 and 23.30.

Gas Prices in Europe are worth watching – having risen by 50% this month alone. For Softs, Ukraine is working on insuring Grain deliveries while the US Wheat crop looks possibly disappointing – watch wheat prices.

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The economic Agenda is fairly thin today with US existing home sales the most interesting but with the BRICS meeting kicking off and the recent divergences it should be a great trading day.

Tuesday August 22

Start: BRICS Summit

Data: Norway GDP Growth, US existing Home sales

Earnings Baidu Inc, Lowe's Cos

Wednesday August 23

Data: Japan PMI, Denmark consumer confidence, FR DE, EU PMI, EU Consumer confidence

Earnings China Construction Bank, China Life Insurance ,Analog Devices Inc, NVIDIA Corp

Thursday August 24
Start: The 2023 Economic Policy Symposium in Jackson Hole  "Structural Shifts in the Global Economy," Aug. 24-26.

Data: Turkey Rate decision, US Durable Goods orders, Initial jobless claims

Earnings CRH PLC, AIA Group, Toronto-Dominion, Workday Inc, Marvell Technology, Royal Bank of Canada

Friday August 25

Data: Japan CPI; PPI, DE GDP & IFO, University of Michigan

Earnings: China Merchants Bank China Petroleum & Chemical Zijin Mining Group