Macro: Sandcastle economics
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Morning Brew December 1 2023
Erik Schafhauser
Senior Relationship Manager
Summary: Welcome to December
Good Morning
Welcome to December, as I will be off on Mondy, the next Morning Brew is coming on Tuesday.
November was certainly spectacular and it will be very interesting if the sentiment can hold into year end. I doubt the expectation for central banks can realistically become more dovish so the impulse would need to come from a different source. The FED as well as the ECB are seen to lower rates by April 2024.
The S&P and the Nasdaq had the best month since July 22, the Dow had the best month since October 22 and closed at the highest level this year.
In the past month the us 500 gained 5.8%, the US 30 6.3% and the US Tech 100 6.9%. The GER40 8.7% and the Swiss 20 4.4%.
Volumes were huge yesterday at almost 30% above the average and the Vix is near a 4 year low and down 20% on the month.
FX also saw strong moves with the USD Index down 3% EURUSD up 2.7%, GBPUSD 3.6 and USDJPY -1.6%. Gold gained 2.8% and Silver a whopping 10.9%, Bitcoin 9.1% and Ethereum 16%. Gold recorded the first monthly close above 2000.
Opec agreed to cut production by app 2.2mio Barrel per day after oil fell 8% on the month, the news seem to put the lower demand in focus more than the lower production, Crude is trading at 75.85.
After Hamas fires a Rocket to Israel acc to Israel, Israel resumed the military operation in Gaza.
Today we are expecting international PMI – the Chinese one already came at a disappointing 49.8 vs an expectation of 50.7.
December will be a busy month with Central Banks, lots of data, outlooks and yearend adjustments, and traditionally strong moves. There is a chance of a pause in the rally simply for mean reversion.
Key Events
Friday
- Data Japan Unemployment Rate, China Caixin PMI, International PMI, Canada Unemployment rate
- Earnings National Bank of Canada, Bank of Montreal,
Monday
- Data Japan Monetary Base, Turkey CPI
Tuesday
- Data: Japan CPI, Australia Rate decision, Global PMI,
Expiries
Physically Settled Futures
HOZ3 will expire 30 Nov 2023 at 16:00 GMT
RBZ3 will expire 30 Nov 2023 at 16:00 GMT
Expiring CFDs
LIVECATTLEDEC23 will expire 30 Nov 2023 at 16:00 GMT
OILUKJAN24 will expire 30 Nov 2023 at 16:00 GMT
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