Senior Relationship Manager
Summary: Equities Risk On ahead of the FOMC supported by China hopes.
Good Morning,
Comments by the Vice Primier of China cause a surge in Chinese Equities and overall risk on in equities. Hopes are the Chinese government will take steps to support the economy in the recent corona spike.
At the same time Ukranian President Zelenskiy is calling peace talks more realistic, US President Biden will attend the NATO Summit
It is not fully clear acc to Reuters if Russia defaulted on it`s debt. There is a grace period until April 15.
Today the US Retail sales will be released at 13:30 CET and the FOMC Rate decision will be released at 19:00, followed by the press conference at 19:30.
Expectation has shifted a little since Monday, futures now indicate a 87% probability for a 25 BSP hike and 13 for 50, Monday the split was 93/7. Our Steen Jacobsen expects a clear message that the Fed sees 75 BPS hikes required until after the May 4 meeting. So if there are only 25 BPS today, Powell will strongly hint at 50 BPS in May.
Indexes gained yesterday as the PPI came a little lower than feared and over night could record further gains.
Hong Kong is up almost 10%, the US500 2.7% and Dax 1.88.
US 10 year yields remain high at 2.19, the USD Index falls to 98.8. EURUSD is just below the 1.10 level at 1.0965 and GBPUSD at 1.3043. Gold and Silver 1915 and 24.80.
Remain extremely cautious in all directions today as markets should be news driven and very nervous.
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.