Global Market Quick Take: Europe – August 7, 2023 Global Market Quick Take: Europe – August 7, 2023 Global Market Quick Take: Europe – August 7, 2023

Global Market Quick Take: Europe – August 7, 2023

Macro 5 minutes to read
Saxo Strategy Team

Summary:  The mood across financial markets have certainly changed with the US debt downgrade from Fitch and more indicators suggesting significant headwinds in the global manufacturing sector. Stagflation is now clearly a scenario that cannot be ruled out. Despite the fresh risk-off waves hitting markets US equity futures are attempting to rebound in early trading.

What is our trading focus?

US equities (US500.I and USNAS100.I): S&P 500 bounces off the 4,500 level

S&P 500 futures are attempting this morning to rebound off the important 4,500 level up 0.4%. The market is weighing the balance between worsening credit conditions leading potentially to a recession and the mixed NFP figures on Friday that might lead the Fed to move to easing mode. The market is getting more nervous and focus will be on credit indicators and company outlooks in the Q2 earnings releases.

FX: Dollar slips as July NFP lacks conviction for another Fed rate hike

The US dollar slid on Friday amid a headline miss in July NFP, even as the details of the report had some hawkish elements. Treasuries gained on Friday after a sell-off earlier in the week and underpinned a softer dollar. Lower Treasury yields also helped the Japanese yen, USDJPY slid below 142 from highs of 143.89 last week but pair made its way back higher to 142.20 in the Asian session. EURUSD gained to 1.1042 but focus returned to 1.10 in the Asian hours today. GBPUSD had a more modest reaction to USD selloff, trading below 1.2750 with BOE’s dovish turn last week underpinning. AUDUSD also unable to sustain gains above 0.66.

Crude oil: sixth consecutive week of gains

The supply tightness concerns continued to underpin the crude oil market which saw a sixth consecutive weeks of gains last week amid announcements of deeper cuts from Saudi Arabia and Russia and sharp declines in inventory. WTI crude prices rose 1.5% while Brent rose 1.3% despite a mixed NFP report. This morning Brent Crude is sliding a bit lower from Friday’s close.

What is going on?

Siemens Energy falls 4% as wind business losses balloons to €4.5bn

The problems in Siemens Energy’s wind business are certainly not over with the company announcing this morning that it sess fiscal loss of €4.5bn due to more writedowns in its wind business due to faulty wind turbine designs. On a positive note Q3 orders (ending 30 June) are €14.9bn vs est. €9.9bn driven by strong order growth in its wind turbine business and grid technologies related to electricity infrastructure.

Mixed US NFP jobs report to continue the goldilocks

Headline jobs added came in at 187k in July, missing the 200k estimate and coming in just above last month’s 185k which was revised lower from 209k. Private payrolls jumped to 172k from 128k, while government payrolls were responsible for a much smaller 15k jobs in July vs the high 57k in June. Elsewhere, the unemployment rate moved lower to 3.5% from 3.6% and the average hourly earnings were hot as well, rising 0.4% M/M (exp. 0.3%, prev., 0.4%), with the Y/Y rising 4.4% (exp. 4.2%, prev. 4.4%), although one also has to consider the average hours worked falling to 34.3 in July, back to the joint-lowest post-COVID. Such a report keeps the market reluctant to price in another Fed rate hike, but a host more data is due ahead of the next meeting, importantly the CPI due this week.

Some Fed members still leaning hawkish

Some hawkish comments from Fed member Michelle Bowman were heard over the weekend. She warned more rate hikes "will likely be needed," a contrast with other Fed officials advocating wait-and-see. The governor is "looking for consistent evidence" that inflation continues to moderate. Raphael Bostic and Austan Goolsbee said after Friday's slower job growth data that the labor market is becoming better balanced, so the FOMC can afford to be patient. Note that Bowman and Bostic are both having speeches today.

Maersk warns of global trade downturn

Danish shipping and logistics group Maersk, the world's largest owner of container ships and one of the best bellwethers for global trade, warned of a “longer and deeper” contraction in global trade. Maersk now sees global container volume growth in the range of -4% to -1% compared to -2.5% to +0.5% previously.

Global food prices jumped higher in July

Global food prices increased the most in 1.5 years as trade disruptions from the El Nino weather phenomenon battered agricultural-producing countries, and Russia's exit from a crucial UN-backed agriculture deal stoked supply concerns. The Food and Agriculture Organization of the United Nations (FAO) reported Friday that the global food index, which tracks monthly changes in the international prices of globally-traded food commodities, averaged 123.9 in July, up 1.3% from the previous month. This was the largest monthly gain since March 2022.

Highest first half gold demand from central banks on record

Central banks around the world added a record amount of gold to their reserves through the first half of 2023. Net central bank gold purchases totalled 387 tons through the first half of the year, according to data compiled by the World Gold Council. That was the highest first-half total since the organization started compiling quarterly data in 2000. China’s PBoC was the biggest buyer, followed by Singapore’s MAS, while Turkey turned to be a net seller in Q2 due to local market dynamics.

What are we watching next?

Europe’s industrial contraction

The problems are growing in Europe’s manufacturing sector with Germany leading the weakness. With credit conditions tightening and more negative signals coming from the global cyclical manufacturing sector Europe could become the first beacon of what to expect, so we are monitoring European equities and bonds this week.

Technical Analysis

  • S&P 500. Top & reversal pattern. Correction very likely. Support at 4,455
  • Nasdaq 100. Correction down to 15K-14687 likely
  • DAX correction. Below 16K but uptrend intact
  • AEX25 Uptrend intact after closing above 768
  • BEL20 uptrend but likely minor correction
  • CAC40 uptrend intact closing above 7,251
  • EURUSD Finding support at 0.786 retracement. Likely bounce and uptrend to resume
  • Dollar Index rejected at 0.786 retracement at 102.41
  • GBPUSD bounced from key support at 1.2590. Could bounce from here. RSI bullish
  • USDJPY Rejected at 0.786 retracement but in uptrend.
  • Gold finding support at 0.618 retracement at 1,929. 
  • Copper rising channel. Bouncing from lower trendline and 382
  • Brent reaching resistance at 87.25. Likely to be rejected
  • WTI reaching resistance at 83.50
  • US 10-year above 4% and above resistance. Next resistance at 4.22

Earnings to watch

The Q2 earnings season has so far been a positive for the equity market with revenue and earnings surprising to the upside with the consumer discretionary being the biggest positive surprise on a sector level. This week the earnings will continue albeit at a slower pace than the previous weeks with today’s US earnings focus on private equity firm KKR and software company Palantir.

Earnings this week:

  • Monday: Siemens Energy, KKR, Palantir, BioNTech, Tyson Foods
  • Tuesday: Barrick Gold, Bayer, SoftBank, Daikin Industries, Glencore, Eli Lilly, UPS, Zoetis, Duke Energy, Li Auto, Coupang, Global Foundries, Rivian Automotive
  • Wednesday: Commonwealth Bank of Australia, Vestas Winds Systems, Novozymes, Sampo, E.ON, Generali, Sony, NTT, Honda Motor, Flutter Entertainment, Delhaize, Walt Disney, Trade Desk, Illumina, Roblox
  • Thursday: KBC Group, Brookfield, Novo Nordisk, Orsted, Siemens, Deutsche Telekom, Allianz, Munich Re, Hapag-Lloyd, RWE, Antofagasta, Zurich Insurance, Alibaba
  • Friday: Constellation Software, Wilmar International

Economic calendar highlights for today (times GMT)

0830 – Eurozone Sentix Investor Confidence

1230 – Fed speeches from Bostic and Bowman

Quarterly Outlook 2024 Q3

Sandcastle economics

01 / 05

  • Macro: Sandcastle economics

    Invest wisely in Q3 2024: Discover SaxoStrats' insights on navigating a stable yet fragile global economy.

    Read article
  • Bonds: What to do until inflation stabilises

    Discover strategies for managing bonds as US and European yields remain rangebound due to uncertain inflation and evolving monetary policies.

    Read article
  • Equities: Are we blowing bubbles again

    Explore key trends and opportunities in European equities and electrification theme as market dynamics echo 2021's rally.

    Read article
  • FX: Risk-on currencies to surge against havens

    Explore the outlook for USD, AUD, NZD, and EM carry trades as risk-on currencies are set to outperform in Q3 2024.

    Read article
  • Commodities: Energy and grains in focus as metals pause

    Energy and grains to shine as metals pause. Discover key trends and market drivers for commodities in Q3 2024.

    Read article

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 is not intended to and does not change or expand on this. 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 (
- Full disclaimer (
- Full disclaimer (

Business Hills Park – Building 4,
4th Floor, office 401, Dubai Hills Estate, P.O. Box 33641, Dubai, UAE

Contact Saxo

Select region


Trade responsibly
All trading carries risk. Read more. To help you understand the risks involved we have put together a series of Key Information Documents (KIDs) highlighting the risks and rewards related to each product. Read more

Saxo Bank A/S is licensed by the Danish Financial Supervisory Authority and operates in the UAE under a representative office license issued by the Central bank of the UAE.

The content and material made available on this website and the linked sites are provided by Saxo Bank A/S. It is the sole responsibility of the recipient to ascertain the terms of and comply with any local laws or regulation to which they are subject.

The UAE Representative Office of Saxo Bank A/S markets the Saxo Bank A/S trading platform and the products offered by Saxo Bank A/S.