Morning Brew May 24 2023

Saxo Morning Brew

The Debt Ceiling, remains the key topic in the markets, followed by cooling real estate markets and overall economic worries and trade frictions with China with inflation continuing to loom over markets as well. Equities were under pressure yesterday and US Yields rose. The S&P lost 1.1%, the and the Dow 0.7% and the Nasdaq 1.3%, the GER40 fell to 16.000 again.

2 year Yields in the US rose to 4.4% before receding to 4.3 again, The USD Index tested the resistance at 103.60 now 103.40. EURUSD seems to have found some support at 1.0760 to trade at 85, GBPUSD at 1.2400 to trade at 40, USDJPY is at 138.45.

Gold and Silver also rebounded somewhat to 1976 and 23.45 from 1952 and 23.12.

After James Bullard and Neel Kashkari spoke hawkishly on Monday, todays Fed Minutes will be watched carefully. The most likely outcome of the Fed meeting on June 14^th is still no action but the probability of a hike by 25 basis points has risen to 32% and the year end rate is traded only 34 basis points below the current market.

Oil rose yesterday and remains friendly today gained after U.S. inventories and fuel supplies came lower and the warning from Saudi Arabia to speculators.

Our Strategist Charu Chanana published a very insightfull story on Investment opportunities in India: Investing for the Next Decade,

UK Inflation fell to 8.7% but is 0.5% above expectation which was at 8.2%.

Remain cautions around the US Debt Ceiling and the FOMC Minutes today, as well as the German IFO.

Interesting comments came out of the US saying doners as well as voters need to put pressure on their representatives to get the Debt ceiling issue resolved – more pressure on markets may be needed.

Wednesday 24 May:
Data: New Zealand RBNZ Official Cash Rate (May), United Kingdom Inflation (Apr), Germany Ifo Business Climate (May), United States Fed FOMC Minutes (May)

Earnings: Xiaomi, XPeng, Lenovo, Nvidia

Thursday 25 May

Germany GDP (Q1, final), United States GDP (Q1, 2nd est.), United States Initial Jobless Claims (May 20)

Pending Home Sales (Apr)

Friday 26 May

Japan Tokyo CPI (May), Australia Retail Sales (Apr, prelim), United Kingdom Retail Sales (Apr)

United States Personal Income and Consumption (Apr), Core PCE Price Index (Apr), UoM Sentiment (May, final),

Earnings; Costco, Dollar Tree, Best Buy, Gap, Meituan, NetEase