Senior Relationship Manager
Good Morning
Stocks were little moved since yesterday, the US Indexes ended a bit mixed with the Dow Jones up 0.4%, the S&P 500 up 0.12% and the Nasdaq actually 0.01% lower. The USD Index remains above 90, Silver at 27.75 and Gold at 1892. Bitcoin fell below 40k again.
Driver is basically a tug of war between stimulus measures and the fear of rising rates and yesterday both were on the rise. The US 10 Year Yield rose back to 1.62% on the back of low initial jobless claims and there seems to be progress in the discussions on the US Infrastructure package. Republicans presented a proposal worth 928 bio.
The New York Times expects Joe Biden to announce a 6 trillion budget for 2022.
Japanese Data showed a rising jobless rate in combination with lower prices in the Tokyo area, making more government programs likely. The Nikkei rose almost 2%.
The US Senate voted in favor of the U.S. Innovation and Competition Act of 2021, or USICA, aimed to strengthen the US economy against Chinese competition.
Acc to Reuters, Energy regulators in China's Sichuan province will start investigating the impact of crypto mining
Airbus urged suppliers to prepare for steep increases in jet output, this also drove Boeing shares higher.
Key today is likely to be the US Personal Consumption at 14:30 CET, a hint at inflation.
Althea Spinozzi published a very good article on rates yesterday:
The good (central banks), the bad (inflation) and the ugly (tapering)
Summary: Yesterday's disastrous 15-year Bund auction showed investors that the bond yields can only go higher. Yet, until the German election, the European sovereign space will mimic the US Treasury market. US Treasury yields are trading rangebound since March, and the unprecedented tsunami of liquidity keeps US yields in check. However, we believe that inflationary pressures and tapering fears will put US yields back on track to 2% by summer. Therefore, we may see Bund yields turning positive before the German elections.
Economic Events for the next few days:
Local Start Date | Local Time | Country/Region | Indicator Name | Period | Reuters Poll | Prior |
27 May 2021 | 03:00 | South Korea | Bank of Korea Base Rate | May | 0.50% | 0.50% |
27 May 2021 | 03:30 | Australia | Capital Expenditure | Q1 | 2.0% | 3.0% |
27 May 2021 | 14:30 | United States | Durable Goods | Apr | 0.7% | 0.8% |
27 May 2021 | 14:30 | United States | GDP 2nd Estimate | Q1 | 6.5% | 6.4% |
27 May 2021 | 14:30 | United States | Initial Jobless Clm | 22 May, w/e | 425k | 444k |
28 May 2021 | 01:30 | Japan | CPI Tokyo Ex fresh food YY | May | -0.2% | -0.2% |
28 May 2021 | 01:30 | Japan | CPI, Overall Tokyo | May | -0.6% | |
28 May 2021 | 01:30 | Japan | Jobs/Applicants Ratio | Apr | 1.10 | 1.10 |
28 May 2021 | 01:30 | Japan | Unemployment Rate | Apr | 2.7% | 2.6% |
28 May 2021 | 08:45 | France | GDP QQ Final | Q1 | 0.4% | 0.4% |
28 May 2021 | 08:45 | France | GDP QQ Final | Q1 | 0.4% | 0.4% |
28 May 2021 | 08:45 | France | CPI (EU Norm) Prelim YY | May | 1.8% | 1.6% |
28 May 2021 | 09:00 | Switzerland | KOF Indicator | May | 136.0 | 134.0 |
28 May 2021 | 11:00 | Euro Zone | Consumer Confid. Final | May | -5.1 | -5.1 |
28 May 2021 | 13:00 | Brazil | IGP-M Inflation Index | May | 4.00% | 1.51% |
24 May 2021 | 13:00 | Ghana | Prime Interest Rate | May | 14.50% | 14.50% |
28 May 2021 | 13:00 | Angola | Interest Rate | 31 May | 15.50% | |
28 May 2021 | 14:30 | United States | Consumption, Adjusted MM | Apr | 0.5% | 4.2% |
28 May 2021 | 16:00 | United States | U Mich Sentiment Final | May | 82.9 | 82.8 |
28 May 2021 | 22:00 | Colombia | Interest Rate | May | 1.75% | |
31 May 2021 | 01:50 | Japan | Industrial O/P Prelim MM SA | Apr | 4.1% | 1.7% |
31 May 2021 | 03:00 | China (Mainland) | NBS Manufacturing PMI | May | 51.1 | 51.1 |
31 May 2021 | 08:00 | Denmark | GDP QQ Prelim | Q1 | 0.7% | |
31 May 2021 | 08:00 | Denmark | GDP YY Prelim | Q1 | -1.5% | |
31 May 2021 | 08:00 | Denmark | Unemployment Rate | Apr | 4.1% | |
31 May 2021 | 09:00 | Turkey | GDP Quarterly YY | Q1 | 6.7% | 5.9% |
31 May 2021 | 09:00 | Switzerland | Official Reserves Assets CHF | Apr | 990,524.58M | |
31 May 2021 | 09:00 | Austria | GDP Growth QQ Final | Q1 | 0.2% | |
31 May 2021 | 11:00 | Italy | CPI (EU Norm) Prelim MM | May | 0.9% | |
31 May 2021 | 11:00 | Italy | CPI (EU Norm) Prelim YY | May | 1.0% | |
31 May 2021 | 12:00 | Portugal | GDP QQ Final | Q1 | -3.3% | |
31 May 2021 | 14:00 | Germany | CPI Prelim YY | May | 2.3% | 2.0% |
31 May 2021 | 14:00 | Germany | HICP Prelim YY | May | 2.5% | 2.1% |
31 May 2021 | 14:00 | India | GDP Quarterly YY | Q4 | 1.0% | 0.4% |
31 May 2021 | 15:00 | Israel | Interest Rate Decision | May | 0.10% | |
1 Jun 2021 | 02:30 | Japan | Jibun Bank Mfg PMI | May | 52.5 | |
1 Jun 2021 | 02:30 | South Korea | IHS Markit Mfg PMI | May | 54.6 | |
1 Jun 2021 | 03:30 | Australia | Building Approvals | Apr | 17.4% | |
1 Jun 2021 | 03:30 | Australia | Current Account Balance SA | Q1 | 14.5B | |
1 Jun 2021 | 03:30 | Australia | Net Exports Contribution | Q1 | -0.1% | |
1 Jun 2021 | 03:45 | China (Mainland) | Caixin Mfg PMI Final | May | 51.7 | 51.9 |
1 Jun 2021 | 06:30 | Australia | RBA Cash Rate | Jun | 0.10% | 0.10% |
1 Jun 2021 | 07:00 | India | IHS Markit Mfg PMI | May | 52.0 | 55.5 |
1 Jun 2021 | 08:00 | United Kingdom | Nationwide house price mm | May | 2.1% | |
1 Jun 2021 | 08:00 | United Kingdom | Nationwide house price yy | May | 7.1% | |
1 Jun 2021 | 08:00 | Russia | Markit Mfg PMI | May | 50.4 | |
1 Jun 2021 | 08:15 | India | Cash Reserve Ratio | 4 Jun | ||
1 Jun 2021 | 08:15 | India | Repo Rate | 4 Jun | ||
1 Jun 2021 | 08:15 | India | Reverse Repo Rate | 4 Jun | ||
1 Jun 2021 | 09:00 | Turkey | Manufacturing PMI | May | 50.4 | |
1 Jun 2021 | 09:45 | Italy | Markit/IHS Mfg PMI | May | 60.7 | |
1 Jun 2021 | 09:50 | France | Markit Mfg PMI | May | 59.2 | |
1 Jun 2021 | 09:55 | Germany | Markit/BME Mfg PMI | May | 64.0 | |
1 Jun 2021 | 09:55 | Germany | Unemployment Chg SA | May | 9k | |
1 Jun 2021 | 09:55 | Germany | Unemployment Rate SA | May | 6.0% | 6.0% |
1 Jun 2021 | 10:00 | Euro Zone | Markit Mfg Final PMI | May | 62.8 | |
1 Jun 2021 | 10:30 | United Kingdom | Markit/CIPS Mfg PMI Final | May | 66.1 | |
1 Jun 2021 | 11:00 | Italy | GDP Final QQ | Q1 | -0.4% | |
1 Jun 2021 | 11:00 | Italy | GDP Final YY | Q1 | -1.4% | |
1 Jun 2021 | 11:00 | Turkey | ITO Istanbul Retail Prices | May | 1.01% | |
1 Jun 2021 | 11:00 | Euro Zone | HICP Flash YY | May | 1.9% | 1.6% |
1 Jun 2021 | 11:00 | Euro Zone | HICP-X F&E Flash YY | May | 0.8% | |
1 Jun 2021 | 11:00 | Euro Zone | Unemployment Rate | Apr | 8.1% | 8.1% |
1 Jun 2021 | 14:00 | Brazil | GDP QQ | Q1 | 3.2% | |
1 Jun 2021 | 14:00 | Brazil | GDP YY | Q1 | -1.1% | |
1 Jun 2021 | 14:00 | New Zealand | Milk Auctions | 1 Jun, w/e | 4,150 | |
1 Jun 2021 | 14:30 | Canada | GDP QQ Annualized | Q1 | 9.6% | |
1 Jun 2021 | 14:30 | Canada | GDP MM | Mar | 0.4% | |
1 Jun 2021 | 15:00 | Brazil | Markit Mfg PMI | May | 52.3 | |
1 Jun 2021 | 15:30 | Canada | Markit Mfg PMI SA | May | 57.2 | |
1 Jun 2021 | 15:45 | United States | Markit Mfg PMI Final | May | 61.5 | |
1 Jun 2021 | 16:00 | United States | ISM Manufacturing PMI | May | 60.8 | 60.7 |
1 Jun 2021 | 16:30 | Mexico | Markit Mfg PMI | May | 48.4 | |
2 Jun 2021 | 02:30 | Indonesia | IHS Markit PMI | May | 54.6 | |
2 Jun 2021 | 03:30 | Australia | Real GDP QQ SA | Q1 | 3.1% | |
2 Jun 2021 | 03:30 | Australia | Real GDP YY SA | Q1 | -1.1% | |
2 Jun 2021 | 14:00 | Brazil | Industrial Output YY | Apr | 10.5% | |
2 Jun 2021 | 15:00 | Mauritius | REPO Rate | Q2 | 1.85% | |
2 Jun 2021 | 23:00 | Chile | Interest Rate | May | 0.50% | |
2 Jun 2021 | Indonesia | Inflation YY | May | 1.42% | ||
3 Jun 2021 | 02:30 | Japan | Services PMI | May | 49.5 | |
3 Jun 2021 | 03:30 | Australia | Retail Sales MM Final | Apr | 1.1% | |
3 Jun 2021 | 03:30 | Australia | Trade Balance G&S (A$) | Apr | 5,574M | |
3 Jun 2021 | 03:45 | China (Mainland) | Caixin Services PMI | May | 56.3 | |
3 Jun 2021 | 06:15 | Saudi Arabia | IHS Markit Comp PMI | May | 55.2 | |
3 Jun 2021 | 07:00 | India | IHS Markit Svcs PMI | May | 49.0 | 54.0 |
3 Jun 2021 | 08:00 | United Kingdom | Reserve Assets Total | May | 178,963.97M | |
3 Jun 2021 | 08:00 | Russia | Markit Services PMI | May | 55.2 | |
3 Jun 2021 | 09:00 | Turkey | CPI MM | May | 1.68% | |
3 Jun 2021 | 09:15 | South Africa | Std Bank Whole Econ PMI | May | 53.7 | |
3 Jun 2021 | 09:50 | France | Markit Serv PMI | May | 56.6 | |
3 Jun 2021 | 09:50 | France | Markit Comp PMI | May | 57.0 | |
3 Jun 2021 | 09:55 | Germany | Markit Services PMI | May | 52.8 | |
3 Jun 2021 | 09:55 | Germany | Markit Comp Final PMI | May | 56.2 | |
3 Jun 2021 | 10:00 | Euro Zone | Markit Serv Final PMI | May | 55.1 | |
3 Jun 2021 | 10:00 | Euro Zone | Markit Comp Final PMI | May | 56.9 | |
3 Jun 2021 | 14:30 | United States | Initial Jobless Clm | 24 May, w/e | ||
3 Jun 2021 | 15:45 | United States | Markit Comp Final PMI | May | 68.1 | |
3 Jun 2021 | 15:45 | United States | Markit Svcs PMI Final | May | 70.1 | |
3 Jun 2021 | 16:00 | United States | ISM N-Mfg PMI | May | 62.9 | 62.7 |
4 Jun 2021 | 03:00 | Philippines | CPI YY | May | 4.5% | |
4 Jun 2021 | 08:15 | India | Cash Reserve Ratio | 4 Jun | 4.00% | 3.50% |
4 Jun 2021 | 08:15 | India | Repo Rate | 4 Jun | 4.00% | 4.00% |
4 Jun 2021 | 08:15 | India | Reverse Repo Rate | 4 Jun | 3.35% | 3.35% |
4 Jun 2021 | 14:30 | United States | Non-Farm Payrolls | May | 621k | 266k |
4 Jun 2021 | 14:30 | United States | Unemployment Rate | May | 5.9% | 6.1% |
4 Jun 2021 | 14:30 | United States | Average Earnings YY | May | 0.3% | |
4 Jun 2021 | 14:30 | Canada | Employment Change | May | -207.1k | |
4 Jun 2021 | 14:30 | Canada | Unemployment Rate | May | 8.1% | |
4 Jun 2021 | 15:00 | Brazil | Markit Services PMI | May | 42.9 | |
4 Jun 2021 | 15:00 | Brazil | Markit Composite PMI | May | 44.5 | |
4 Jun 2021 | 16:00 | United States | Factory Orders MM | Apr | 1.1% |
(Refinitiv)
AI: The good, the bad, and the bubble
While a deep recession may not be iminent thanks to central bank policy, interest rates will have to stay high for longer, and this will be accompanied by volatility risk from the unwinding of bubbles, especially within AI.
Steen Jakobsen,
Chief Investment Officer
The emergence of advanced AI systems is by far the most surprising event this year, turning everything upside down, while risks and benefits are debated. AI will also become an arms race between the US and China.
Peter Garnry,
Head of Equity Strategy
As China navigates global fragmentation, its cycle of technology application, productivity enhancement, and growth is threatened by US breakthroughs in generative AI, limited computing power, and geopolitical tensions.
Redmond Wong,
Market Strategist
Japan’s expertise in semiconductors and robotic integration could be the foundation of AI dominance. Combining two of this year's themes, Japanese equities and artificial intelligence, brings a wave of opportunities.
Charu Chanana,
Market Strategist
The AI fever has turned the technology into a darling, pushing crypto further into no-man’s-land. There are striking similarities between AI and crypto, and if these are to come full circle, AI won't be spared for bubbles.
Mads Eberhardt,
Cryptocurrency Analyst
Stocks related to artificial intelligence (AI) have appeared on investors' radars. Expectations are high, but it may be necessary to consider how to get exposure to AI in a diversified way.
Hans Oudshoorn,
Trainer Academy
The USD is on its back foot as markets celebrate an eventual Fed rate peak and steady long US yields. The stakes are even higher for the Japanese yen if longer major sovereign yield curves have to price in economic acceleration.
John J. Hardy,
Head of FX Strategy
While commodities, broadly speaking, have faced some tough months, a partial reversal during June could signal that the asset class is getting back on its feet with energy holding up and precious metals with upside potential.
Ole S. Hansen,
Head of Commodity Strategy
As inflation remains high central banks face hard decisions about whether they should keep hiking interest rates or stop. Meanwhile, the rise of AI creates bubble-like conditions that only make the decision harder.
Althea Spinozzi,
Senior Fixed Income Strategist