Senior Relationship Manager
Good Morning
Strong Job openings indicated that the labor market in the US is not cooling off, 11.2 million job openings are looking to be filled. Also the Consumer confidence beat expectations. That lead to worries the fed will tighten further and put pressure on equities. The probability of a 75BPS hike rose to 75% before falling back to 70 this morning. Nasdaq as well as the S&P fell below the 50 day moving average.
All 3 Indexes in the US Fell by app 1%, this morning we see a recovery of about 0.6% across the board.
The GER40 is trading at 13025, the US500 at 4011 and the US Tech 100 at 12441.
The USD Index is trading a little below the highs, the EUR remains “strong” on expectations of a hawkish ECB. EURUSD is trading at 1.0036 and GBPUSD at 1.1683. The Japanese Yen is approaching areas again where an intervention by the BoJ may be looming, we are at 138.40. Gold and more so silver fell yesterday but also recovered slightly, Gold is at 1724 and Silver at 18.48.
Oil fell yesterday despite Russia cutting gas in the Nordstream pipeline in an expected move. Corona Numbers in China and rising rates cause worries on demand
Chinas factory activity remains below 50 but beat expectations by 0.2%. The party congress is planned for October.
Bitcoin is above 20k again
Reuters reports liquidity issues in the US treasury markets as the Fed is withdrawing liquidity
For Swiss Franc Traders the official reserves are of interest today at 9, for the Euro, the HICP at 11 will be key. The Nonfarm Payroll on Friday is coming into focus.
Economic Data:
Wednesday: Norway GDP, CH Official reserves, EU HICP, Italy CPI
Thursday: IT, FR, DE and EU PMI, EU Unemployment Rate, US Initial Jobless claims, PMI
Friday: US Nonfarm Payrolls
Expires:
Physically Settled Futures:
RBOB Gasoline (RBU2) will expire 31 Aug at 15:00 GMT
Random Length Lumber (LBU2) will expire 1st Sep at 15:00 GMT
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