Senior Relationship Manager
Summary: USD gives up ground on Dove Powell, Equities stable
Good Morning,
Jerome Powell's testimony was more dovish than FX traders had feared but not as dovish as equity traders had hoped. He basically kept his stance on the transitory inflation : "The high inflation readings are for a small group of goods and services directly tied to the reopening" he also hinted at measures in the next 6 months.
US Indexes close mixed with the Dow and the S&P can rise moderately, the NASDAQ gives up a little ground. Apple rises on hints at strong IPhone demand, Wells Fargo and Citi could beat expectations in their earnings reports, Citi falls 0.3% Wells Fargo jumps 4%.
The USD Index dropped to 92.35 with EURUSD off support along with Cable Gold and Silver. EURUSD could gain to 1.1842, GBPUSD at 1.3850. Gold 1830 and Silver 26.35. Bitcoin seems stuck in a tightening range, currently at 32600. Acc to a Reuters report, Saudi Arabia and the UAE could agree on a compromise, oil receded 1%.
Dax remains near 15800 and needs to break that level for a run to 16200 initially. It might be we need the next ECB meeting to decide a clear direction. Daimler just reported better than expected earnings. The SMI remains above 12000 but seems to also need help to move ahead.
Overnight, Chinese data slightly disappointed versus the official estimates, but after recent data points this was expected and loosening monetary policy is seen as compensating sufficiently.
The U.S. Senate banned the import of products from China's Xinjiang region in an effort to put pressure on China to respect human rights in the area.
Today, watch for the earning releases, initial jobless claims and the continuation of the Powell testimony at 15:30 CET.
Todays Earning reports:
Skandinaviska Enskilda Banken, Fast Retailing, Bank of New York Mellon, Morgan Stanley, UnitedHealth Group, US Bancorp, Truist Financial, Progressive Corp and Cintas Corp
Please remember that CLQ1 will expire on 20th July at 15:00 GMT
Local Start Date | Local Time | Country/Region | Indicator Name | Period | Reuters Poll |
15 Jul 2021 | 03:00 | South Korea | Bank of Korea Base Rate | Jul | |
15 Jul 2021 | 03:30 | Australia | Employment | Jun | 30.0k |
15 Jul 2021 | 03:30 | Australia | Unemployment Rate | Jun | 5.0% |
15 Jul 2021 | 04:00 | China (Mainland) | Urban Investment (YTD)YY | Jun | 12.1% |
15 Jul 2021 | 04:00 | China (Mainland) | Industrial Output YY | Jun | 7.8% |
15 Jul 2021 | 04:00 | China (Mainland) | Retail Sales YY | Jun | 11.0% |
15 Jul 2021 | 04:00 | China (Mainland) | GDP YY | Q2 | 8.1% |
15 Jul 2021 | 08:00 | United Kingdom | Claimant Count Unem Chng | Jun | |
15 Jul 2021 | 08:00 | United Kingdom | ILO Unemployment Rate | May | 4.7% |
15 Jul 2021 | 10:00 | Italy | CPI (EU Norm) Final MM | Jun | 0.2% |
15 Jul 2021 | 10:00 | Italy | CPI (EU Norm) Final YY | Jun | 1.3% |
15 Jul 2021 | 12:00 | Euro Zone | Reserve Assets Total | Jun | |
15 Jul 2021 | 14:30 | United States | Initial Jobless Clm | 10 Jul, w/e | 360k |
15 Jul 2021 | 14:30 | United States | Philly Fed Business Indx | Jul | 28.3 |
15 Jul 2021 | 15:15 | United States | Industrial Production MM | Jun | 0.7% |
16 Jul 2021 | 00:45 | New Zealand | CPI QQ | Q2 | |
16 Jul 2021 | 11:00 | Euro Zone | HICP Final MM | Jun | 0.3% |
16 Jul 2021 | 11:00 | Euro Zone | HICP Final YY | Jun | 1.9% |
16 Jul 2021 | 14:15 | Canada | House Starts, Annualized | Jun | 270.0k |
16 Jul 2021 | 14:30 | United States | Retail Sales MM | Jun | |
16 Jul 2021 | 16:00 | United States | U Mich Sentiment Prelim | Jul | 86.5 |
16 Jul 2021 | Japan | JP BOJ Rate Decision | 16 Jul | -0.10% |
2024: The wasted year
Markets are driven by election optimism, overshadowing growing debt and liquidity concerns. The 2024 elections loom large, but economic fundamentals and debt issues warrant cautious investment.
As US economic slowdown hints at a shift away from exceptionalism, USD faces downside with looming Fed cuts. AUD and NZD set to outperform as their rate cuts lag. JPY gains on carry unwind bets and BOJ pivot.
Amid AI and obesity drug excitement, equities see varied prospects: neutral on overvalued US stocks, negative on Japan due to JPY risks, positive on Europe. European defence stocks gain appeal.
With the economic slowdown, quality assets will gain favour, especially sovereign bonds up to 5 years. Central banks' potential rate cuts in Q2 suggest extending duration, despite policy and inflation concerns.
Commodities poised for rebound. The "Year of the Metal" boosts gold and silver, copper awaits rate cuts. Grains may recover, natural gas stabilises. Gold targets $2,300-$2,500/oz, copper's breakout could signal growth.
Markets are driven by election optimism, overshadowing growing debt and liquidity concerns. The 2024 elections loom large, but economic fundamentals and debt issues warrant cautious investment.
As US economic slowdown hints at a shift away from exceptionalism, USD faces downside with looming Fed cuts. AUD and NZD set to outperform as their rate cuts lag. JPY gains on carry unwind bets and BOJ pivot.
Amid AI and obesity drug excitement, equities see varied prospects: neutral on overvalued US stocks, negative on Japan due to JPY risks, positive on Europe. European defence stocks gain appeal.
With the economic slowdown, quality assets will gain favour, especially sovereign bonds up to 5 years. Central banks' potential rate cuts in Q2 suggest extending duration, despite policy and inflation concerns.
Commodities poised for rebound. The "Year of the Metal" boosts gold and silver, copper awaits rate cuts. Grains may recover, natural gas stabilises. Gold targets $2,300-$2,500/oz, copper's breakout could signal growth.