Senior Relationship Manager
Good Morning
The fed was more hawkish than expected yesterday, now in favor of two rate hikes by end of 2023 and raising expected inflation levels. The asset purchases remain in place causing a split reaction. Equities which correlate strongly with the fed`s balance sheet remained fairly strong while the USD gained strongly. EURUSD broke below the 1.20, the USD Index rose app 1%, Gold and Silver drop to 1820 and 27.00. The Dow Jones fell 265.66 points ( 0.77%) , the S&P 500 0.54% and the Nasdaq Composite 0.24%. the GER30 is trading at 15650 and the 10 year yield in the US rose to 1.6%. Bitcoin trades at 38700.
Today the initial jobless rate should be the most interesting unless there is a substantial surprise from the Swiss national Bank at 9:30.
CureVac NV released that it`s COVID-19 vaccine was only 47% effective in a late-stage trial, sending the share down more than 50%.
Hong Kong police raided Apple Daily on Thursday, the first case in which authorities have cited media articles as potentially violating the national security law.
USD Index
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