Senior Relationship Manager
Summary: Reorientaion
Good Morning,
e seem to be in a bit of a consolidation phase where traders and investors are trying to decide what exactly is on and what is driving markets from here.
Key rate decisions are off the table for the next few weeks – Australia and New Zealand are the next significant ones in early April.
We have the recession worries, the banking crisis, Inflation, Geo-Politics, the US Debt ceiling and not least liquidity to keep us busy all the while the coffers remain filled and dips continue to be bought.
Traders should feel at home here as markets from Equities to FX are moving nicely and there are opportunities everywhere – for investors it is a bit more nerve wrecking and hedges or yield enhancing strategies are worth considering.
Most Indexes are a bit in limbo and need a push to find a clear direction, 2 year yields remain low as traders don`t trust the feds view that rates would not be cut this year and this keeps the USD under pressure and trading fairly wildly. The Average true range of EURUSD – basically the daily range the cross moves) is 50% above the level from early March. We were moving app 70 pips early March, now 110. GER40 moves app 250 points on average and is currently at 380.
Gold and Silver profit from the insecurity on the one hand and the weak USD on the other, Gold remains near the 2000 and Silver has broken above 23 again.
While todays agenda is quite full, I expect the market to me more news driven aspecially around the Banking crisis in the US and comments out of the Fed
Friday 24 March
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.