Macro: Sandcastle economics
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Morning Brew June 30 2023
Erik Schafhauser
Senior Relationship Manager
Summary: Key Day with Month / Semester Ultimo, EU HICP and US PCE.
Good Morning,
We are heading into an important day:
First of all a wild first half of 2023 is coming to an end: The US 500 gained 14.4% so far, the GER 40 15.5%, Bitcoin is up 85%, Nvidia 180%, Apple 46% Meta 134% Silver lost 5.6%, Gold is up 4.6%. Oil was the big loser at -13% The USD Index is virtually unchanged, EURUSD is 1.5% higher, GBPUSD +4.3% and USDJOY 10.4%. US 2 year yields are close to where we started the semester but we had swings of more than a full percent.
Today there is the last trading day of the quarter, watch out for last minute position adjustments.
We are heading into a semi-long weekend with Tuesday being the 4th of July holiday and I would expect Monday to be fairly thin in liquidity as everyone who can will be off.
We are expecting the EU HICP at 11 today, as a first source for volatility and the most-watched inflation measure, the Personal Consumption Expenditure at 14:30 today. The Key number, the Core PCE Year on Year is expected at 4.7% - unchanged from the previous month.
In the night to Monday, we expect the Japanese Tankan Index, the Chinese Manufacturing PMI (50.2) and at 8:30 the Swiss CPI (1.8%)
We are seeing fairly wild swings in Gold and Silver at the moment and it may well be the most interesting instruments today. There is a lot of pressure to the downside but so far we have always found buyers. Read Ole`s assessment here
Overnight, China's factory activity declined for the third month in a row while the US and Dutch governments are planning further sanctions on the sale of chipmaking equipment.
The Bank of Japan is continuing to intervene verbally, stating Japan will take appropriate steps should the yen weaken excessively.
Trade safely.
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