Senior Relationship Manager
Summary: Risk on in a week with little economic data
Good Morning,
Risk on sentiment drove stocks in to a strong weekly close that saw the S&P 7% higher . The Dow gained 2.7% the S&P 3.06 and the Nasdaq 3.3% on Friday. Driver was mainly that the economic slowdown and falling commodity prices would allow the FED and other central banks to be less hawkish.
Over night, sentiment remains strong and the GER40 gains to 13167, a break above 13220 would allow for 13500.
US 10 Year yields are at 3.18%, EURUSD 1.0560, GBPUSD at 1.2275, Gold and Silver could gain to 1834 and 21.35 – back in mid range. Oil gains off the low to trade at 107.20 in the US line.
At the G7 Meeting it was announced that an Import ban on Russian Gold is being planned, a break out of the range will likely be driven by rising short term rates, negative for gold, and the probability of a recession – implying rate cuts, positive for gold.
Bitcoin can recover to above 21k and ether to 1215.
The Turkish lira gained an on intervention that restrict lira lending to many companies with more than $1 million in foreign currency cash in the latest step to reverse a slide in the currency.
Russia is likely to in default as bond holders did not receive coupon payments by now
Swiss judges will announce their verdict if Suisse failed to prevent money laundering related to cocaine trafficking.
A winding-up petition has been filed against embattled property developer China Evergrande Group.
A complaint has been filed against Google in Denmark against the Google Job search.
This weeks key events are US Durable Goods Orders today at 14:30, US consumer Confidence tomorrow at 16:00 EU Consumer Confidence and the US GDP on Wednesday Thursday UK GDP, Swiss KOF, German and EU Unemployment,, German Price data, as well as US Consumption data Friday the Japanese will be released, followed by the Chinse and international PMIs
We are likely to see half year and quarterly position adjustments and overall nervous trading, the lack of decisive economic data will make for news driven trading
Expiries
Physically Settled Futures:
NGN2 will expire 27th June at 15:00 GMT
TTFMN2 will expire 28th June at 15:00 GMT
CNM2 will expire 29th June at 8:35 GMT
RRN2, SILN2, SIN2, STFN2, XCN2, XKN2, XWN2, ZCN2, ZLN2, ZMN2, ZSN2 will expire 29th June at 15:00 GMT
Expiring CFDs:
COPPERUSJUL22, CORNJUL22, GASOLINEUSJUL22. HEATINGOILJUL22, SILVERJUL22, SOYBEANOILJUL22, SOYBEANMEALJUL22, SOYBEANSJUL22, SUGARNYJUL22, WHEATJUL22 will expire on 28th of June at 15:00 GMT
CHINA50JUN22, HK50JUN22,SINGAPOREJUN22, TAIWAN95JUN22 will expire 29th June at 2:00 GMT
Remain cautious!
Bond. Long Bond(s)
With real rates being too positive, we see three scenarios: Opportunity to lock in rates at cycle high, government overreach to keep the economy afloat or a complete reset of the economy.
Steen Jakobsen,
Chief Investment Officer
Is a bond bull market ahead? Inflation still poses a risk for investors, but the moment for increasing duration to your portfolio may be approaching towards the end of the year, when central banks might be forced to cut interest rates.
Althea Spinozzi,
Senior Fixed Income Strategist
The furious rate hike cycle has brought gains in the US dollar, but with stagflation risks in Europe and the UK and weakness in the Chinese economy, USD may have more room to run. But a strong dollar could also have repercussions for US growth, emerging markets and commodity prices.
Charu Chanana,
Market Strategist
With the cost of capital rising painfully, stagflation fears are back, illuminating the fragile state of the green transformation, while giving a tailwind to nuclear power, and threatening the growth of AI-related stocks.
Peter Garnry,
Head of Equity Strategy
With supply tightness not only in energy but all commodities, the momentum in commodity prices may continue, pressuring central banks to lower real rates. That could be a good setup for precious metals, including gold, silver and potentially platinum as well.
Ole S. Hansen,
Head of Commodity Strategy
As the pandemic showed, even the US Treasury can experience seismic shifts. With the government increasing the pace of issuing bonds to support fiscal spending, the complex Treasury market and regulatory constraints could spark a liquidity event.
Redmond Wong,
Market Strategist
The tide has turned for bonds. Given the current yields, bonds have become an attractive investment, with added benefits including lower risk than stocks, increased diversification and a steady stream of income unaffected by economic changes.
Peter Siks,
Investment Coach