Erik Schafhauser Zürich Erik Schafhauser Zürich Erik Schafhauser Zürich

Morning BrewNovember 23 2023

Morning Brew 1 minute to read
Erik Schafhauser

Senior Relationship Manager

Summary:  Thanksgiving Today, expect low liquidity


Good Morning

Confusion around the OPEC Meeting that was initially scheduled for the Weekend has been postponed to November 30th and this caused oil to fall and pulling Gold and Silver lower as well.

Equities were friendly, Durable goods orders fell more than expected and Initial Jobless claims as well as the University of Michigan Sentiment were broadly in line – sparking hopes the US economy can avoid a recession on the one hand and end the rate hike cycle at the same time. Indexes gain around half a percentage point in low volumes of only 80% of the average.

The US500 could break above the 4550 to trade at 4560, the US Tech 100 Nas breached the 16000 and the Ger40 is trying to do the same at currently 15950. The USD Index is at 103.88 while 10 Year Yields are at 4.40.

EURUSD briefly fell below 1.09yesterday but retook the level to trade at 1.0908, GBPUSD is 1.2509 and USDJPY 149.06. Gold and Silver are 19950 and 23.65. Ole Hansen pointed out  that in the last few years, Gold and Silver have usually had a very strong December,  with Gold rising 4% on average in the past 5 Decembers and Silver even more than 7. Implied Volatility is fairly low: Gold one month 11.05  with the 200d MA at 12.38,  Silver 23.05 at with the 200d MA at 23.35.

An at the money call in Silver until year end costs app. 75 cents while a move of 7% would put the price of Silver at 25.30 – if you believe that history rhymes, this could be an interesting one.

In the Headlines:

  • Chinese Wealth Manager goes belly up with USD 64 bio in liabilities
  • A Hostage/Prisoner exchange will happen tomorrow at the earliest.
  • A Reuters poll shows analysts to be moderately optimistic, seeing the S&P 500 at 4700 in December 24, the STOXX 600 is seen to rise to 475.
  • Gert Wilders is the big winner of the Dutch election and could be the next PM.

 International PMI will  be watched today along with the rate decisiona from Sweden and Turkey but with the US off, expect little volumes and trade carefully

 

Key Events

Thusday
- Data Germany, France, UK, EU PMI, Swedish &Turkish Rate Decisions, THANKSGIVING
- Earnings

Friday
- Data Japan CPI, German GDP, IFO, Canada Retail Sales, US PMI, Black Friday
- Earnings

Expiries

NGZ3 will expire 28 Nov 2023 at 08:30 GMT

Expiring CFDs

NATGASUSDEC23 will expire 24 Nov 2023 at 16:00 GMT

 

Quarterly Outlook 2024 Q2

2024: The wasted year

01 / 05

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    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.

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    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.

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  • Fixed income: Keep calm, seize the moment

    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.

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  • Commodities: Is the correction over?

    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.

    Read article

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