Morning Brew July 27 2021

Good morning,

Stocks started June on a positive note, but the real surprise was in precious metals. The Dow ended the day flat, the S&P 500 was up 0.4%, and the Nasdaq rose 0.7%. The Magnificent 7 were mostly positive, with Alphabet and Tesla being negative, while the rest were in the green. Volume on U.S. exchanges was 15.67 billion shares, compared with the 17.8 billion average. The DAX is looking good at above 24k.

Gold and silver rose significantly yesterday due to safe haven demand, a weaker USD, and a technical breakout that fueled demand. Overnight, we are witnessing a sell-off from the extremes; gold is now trading at 3365 after testing 3400 yesterday, with a high at 3392. Silver rose almost 2 USD yesterday, with a low of 32.96 and a high of 34.75; now we are at 34.20.

The USD Index is at 98.86, EUR/USD is above 1.14, GBP/USD is at 1.3520, and USD/JPY is at 142.90. Ten-year yields are at 4.42. Bitcoin is at 105,500 and ETH at 2,605. As an interesting bit of data, the UK 30-year yield is the highest in the G7 at 5.40!

Oil prices rose for the second day due to a weaker dollar and geopolitical tensions.

Looking ahead, we expect the EU inflation data, which will shed light on the ECB rate decision on Thursday. The Trump administration wants countries to provide their best offer on trade negotiations by Wednesday as officials seek to accelerate talks.

Geopolitically, Russia issued severe terms to Ukraine for agreeing to a ceasefire; Ukraine has to give up territory and limit its army. Iran is poised to reject a U.S. proposal on Iran's nuclear capabilities.

The Swiss are expected to outline new capital rules for UBS. Smaller rival Julius Baer is looking to cut costs by 159 million.

As we were shown by Gold and Silver, we need to expect sharp moves without immediate obvious cause.

Tuesday, June 3

- Eurozone: Flash CPI Inflation

- Germany: Trade Balance

- US: Factory Orders (April)

- Jolts Job Openings

Wednesday, June 4

- Eurozone: Unemployment Rate (April)

- Germany: Industrial Orders (April)

- Global PMI

- Canada: Bank of Canada Rate Decision

Thursday, June 5

- Eurozone: ECB Interest Rate Decision (expected 25bp cut) & Inflation

- Germany: Industrial Production (April)

- US: Weekly Jobless Claims

- US Trade Balance

- Canada: Trade Balance (April)

Friday, June 6

- DE Trade

- UK Houseprices

- EU GDP

- US: Non-Farm Payrolls (May), Unemployment Rate, Average Hourly Earnings (May)

- Canada: Employment Report (May)

Earnings this week:

• Tuesday: Dollar General, NIO, Signet Jewelers, Ollie's, Ferguson, Donaldson, NESR, CrowdStrike, Hewlett Packard Enterprise, Guidewire, Asana, Couchbase, Mama's Creations, Sportsman's Warehouse, HealthEquity
• Wednesday: Dollar Tree, Sprinklr, REV Group, TechTarget, VersaBank, Thor Industries, Webster Bank, Genesco, MongoDB, PVH, Five Below, Planet, ChargePoint, Verint, Bark, Greif, Descartes, Tillys
• Thursday: Ciena, Cracker Barrel, Lands' End, Brown-Forman, Toro, Hello Group, Victoria's Secret, Waterdrop, BitFufu, Broadcom, DocuSign, Lululemon, Rubrik, Samsara, ServiceTitan, Torrid, Petco, Zumiez, Braze
• Friday: G-III Apparel Group, ABM, FuelCell Energy