Senior Relationship Manager
Summary: Will the calm hold?
Good Morning,
Markets seem to be a bit calmer today but it remains too be seen if we have seen the worst of the banking crisis. This will most likely also be the most important to watch this week.
Overall bank deposits fell in recent weeks and nervousness in the financial system was very dominant – especially in social media. Options on the GLD ETF rose to record highs and risk averseness was the dominant sentiment. Friday, CDS on banks rose strongly driving stocks lower and Gold and Siiver higher-
There are basically two things that can resolve a banking crisis, either government intervention or time so the underlying caution may go on for a while.
Lack of bad news over the weekend and news that First Citizen was purchasing a large part of silicon Valley Bank helps risk sentiment today.
2 Year Yields are on the rise, now near 3.9%, the USD Index is back at 103.2, EURUSD is at 1.0750, GBPUSD 1.2225, USDCHF 0.9195. Gold and Silver are lower at 1970 and 23.00. Gold could be interesting this week with the large amount of call options being bought – if the price rises, there could b a so called gamma squeeze which we saw from the so called meme stocks during the pandemic. A rising price basically becomes a self-fulfilling prophecy as sellers of the options are forced to buy to hedge their exposure.
Equities are also friendly with the US 500 back near the 4000 (3992) the US tech 100 at 12820 and the GER 40 at 15122.
The week is thin on key data, focus will be on the banking crisis, month end adjustments and comments from central bankers and politicians.
Trade safely.-
Monday 27 March
Tuesday, 28 March
Wednesday, 29 March
Thursday, 30 March
Friday, 31 March
Earnings on watch this week:
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.