Senior Relationship Manager
Good Morning,
After the rate decision is before the rate decision.
After the FOMC yesterday we are expecting the SNB at 9;30 CET and the BoE at 13:00 today, in terms of economic data only the Italian CPI at 10:00 and the regular weekly us employment data stand out. The heads of Germany, France and Italy are on the way to Ukraine to meet the President Zelensky.
The FED hiked by the expected 75 basis point – most in 28 years – yesterday and lowered it`s growth expectations substantially relative to the March release. The statement showed that FOMC Members expect to lower rates again in 2024. Powell stated in the press conference to watch inflation expectations closely . Equities rose decently despite a fairly hawkish outlook by Jerome Powell, the S&P 500 closed up 1.46% the Dow gained 1%, and the Nasdaq 2.50%, this morning the mood is a bit less stellar with Indexes down app 0.5% again. Traders seem to be digesting the somewhat bleak economic outlook.
Gold and Silver rose to 1831 and 21.65, EURUSD is again trading at 1.0430 after see-sawing quite a bit from 1.0507 to 1.0355 yesterday. The USD Index is at 105.10. Bitcoin and Cryptos could stabilize off the lows but remains near the lows, Bitcoin is currently at 21900.
The Extraordinary ECB Meeting yesterday provided mainly a bunch of hot air and did not boost confidence the common central bank has any strategy.
Japan’s Trade deficit surged on the week Yen and high prices, providing a dire outlook for the Japanese economy.
The rate decisions by the SNB and the BOE are quite interesting as the expectation is not fully aligned
The SNB is expected to either hold rates or hike 25 BPS to -0.5%. Economists polled by Reuters are on the no change side while Interest rate markets expect a hike with a probability of 78%
The Bank of England is expected to hike by either 0.25 or 0.5%.
GBP and CHF are likely to be quite volatile around the releases at 9:30 and 13:00, we can expect to see some volatility as the market digests the FOMC statements and different interpretations are raised and comments are released.
Trade safely
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.