Erik Schafhauser Zürich Erik Schafhauser Zürich Erik Schafhauser Zürich

Morning Brew July 27 2021

Morning Brew 1 minute to read
Erik Schafhauser

Senior Relationship Manager

Summary:  Weak Start into September


Good Morning

Wednesdays trading in equities appeared lackluster but volumes were actually decent at 11.16 bio bs the 20 day average of 10.52.

Indexes closed lower and fell further over night on weak Asian PMIs and an order by the US Government that bans Nvidia from exporting certain chips to China. After an already low close at 150, the stock fell to 141 in late trading.

The Yen is the most interesting currency, at a 24 year low and near levels that are uncomfortable for Japan. The high of USDJPY was 139.67 and we are currently at 139.40.

USDCHF has risen back to 0.98 from below 0.94 mid-August, Cable fell below 1.17 and seems to be on the way to test the Brexit-panic-lows near 1.1485

EURUSD is little moved at 1.0013. Gold and Silver are trading even lower with Gold defending the 1700 and Silver below the 18 at 17.70.

The European Union announced an emergency energy meeting will be held on 9 September in Brussels  as the 1 year out electricity prices are dropping and almost halved in the last week.

Driver of the nervousness at the moment are not near term data points it seems but longer term projections. The longer term inflation expectation remains high and also the Central Bank rate for July remains at 3.86 and does not indicate a rate cut. Traders have a hard time to digest that.

For now the focus seems to be on the fact that higher rates hurt equities and do not see stocks as inflation protection. The same is the case with precious metals.

Today we will be looking at international PMI , UK House prices and German Retail sales. The non-farm payroll tomorrow is perceived as  more important – it is a part of the FOMC decision for September 22.  If the fed were to hike only 50 bps in September, the forward expectation would likely also shift but right now, a 75 basis point hike is priced in with 75% probability.

 

Economic Data:

Thursday: IT, FR, DE and EU PMI, EU Unemployment Rate, US Initial Jobless claims, PMI

Friday: US Nonfarm Payrolls

 

Expiries

        Physically Settled Futures:

RBOB Gasoline (RBU2) will expire 31 Aug at 15:00 GMT

Random Length Lumber (LBU2) will expire 1st Sep at 15:00 GMT

Milling Wheat (EBMU2) will expire 2nd Sep at 14:00 GMT

      

 

Disclaimer

The Saxo Bank Group entities each provide execution-only service and access to Analysis permitting a person to view and/or use content available on or via the website. This content is not intended to and does not change or expand on the execution-only service. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Rules of Engagement and (v) Notices applying to Saxo News & Research and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Bank Group by which access to Saxo News & Research is gained. Such content is therefore provided as no more than information. In particular no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Bank Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Bank Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on Saxo News & Research or as a result of the use of the Saxo News & Research. Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Bank Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. Saxo News & Research does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of our trading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication under relevant laws.

Please read our disclaimers:
Notification on Non-Independent Investment Research (https://www.home.saxo/legal/niird/notification)
Full disclaimer (https://www.home.saxo/legal/disclaimer/saxo-disclaimer)
Full disclaimer (https://www.home.saxo/legal/saxoselect-disclaimer/disclaimer)

Saxo Bank (Schweiz) AG
The Circle 38
CH-8058
Zürich-Flughafen
Switzerland

Contact Saxo

Select region

Switzerland
Switzerland

All trading carries risk. Losses can exceed deposits on margin products. You should consider whether you understand how our products work and whether you can afford to take the high risk of losing your money. To help you understand the risks involved we have put together a general Risk Warning series of Key Information Documents (KIDs) highlighting the risks and rewards related to each product. The KIDs can be accessed within the trading platform. Please note that the full prospectus can be obtained free of charge from Saxo Bank (Switzerland) ltd. or the issuer.

This website can be accessed worldwide however the information on the website is related to Saxo Bank (Switzerland) Ltd. All clients will directly engage with Saxo Bank (Switzerland) Ltd. and all client agreements will be entered into with Saxo Bank (Switzerland) Ltd. and thus governed by Swiss Law.

The content of this website represents marketing material and has not been notified or submitted to any supervisory authority.

If you contact Saxo Bank (Switzerland) Ltd. or visit this website, you acknowledge and agree that any data that you transmit to Saxo Bank (Switzerland) Ltd., either through this website, by telephone or by any other means of communication (e.g. e-mail), may be collected or recorded and transferred to other Saxo Bank Group companies or third parties in Switzerland or abroad and may be stored or otherwise processed by them or Saxo Bank (Switzerland) Ltd. You release Saxo Bank (Switzerland) Ltd. from its obligations under Swiss banking and securities dealer secrecies and, to the extent permitted by law, data protection laws as well as other laws and obligations to protect privacy. Saxo Bank (Switzerland) Ltd. has implemented appropriate technical and organizational measures to protect data from unauthorized processing and disclosure and applies appropriate safeguards to guarantee adequate protection of such data.

Apple, iPad and iPhone are trademarks of Apple Inc., registered in the U.S. and other countries. App Store is a service mark of Apple Inc.