Morning Brew September 13 2024
Erik Schafhauser
Senior Relationship Manager
Résumé: Calm or volatile Friday the 13th?
Good morning.
Traders are celebrating the glass half full it seems, equities traded friendly on little surprising news, the ECB, US PPI and Initial Jobless claims came basically in line with expectations, the Dow gained 0.6%, the S&P 500 0.75%, the Nasdaq 1.00% the GER 40 is at 19435 and the Japan 225 is 36700. Former New York Federal Reserve President Bill Dudley said there was a strong case for a 50 basis point interest rate cut in the United States and Financial Times as well as the Wall Street Journal stated the September meeting was a close call, The probability of a 50 Basis point cut is now 45% after only 13% after the CPI.
Maybe the most interesting were precious metals, gold hit a new all time high yesterday, the initial driver was that the interest rate expectation remained dovish for the US despite the relatively strong CPI, there were most likely also large purchases by central banks to initiate the move, on hitting the all time high and not immediately being sold off, we saw follow up buys. Gold is now trading at 2570, Silver is back at the 3 handle, this also pulled palladium and platinum higher and mining stocks rose across the board.
Friday is often a volatile day for precious metals, the weekly close will be very interesting to watch.
Oil prices rebounded with Brent Crude futures rising by 1.93% to$71.97, and WTI crude increasing by 2.47% to $68.79. According to the IEA's monthly report, global oil demand growth is "slowing sharply" due to China's cooling economy, pushing prices to a three-year low.
Today the economic agenda is very thin with the EU Industrial production at 11:00 CET US Import Prices at 14:30 and the University of Michigan at 16:00, none of them usually excite markets.
Boeing workers decided to go on strike yesterday
Over the weekend we are expecting important Chinese data and next week will be all about central banks with the US FOMC on Wednesday, the Bank of England on Thursday and the Bank of Japan Friday.
Trade safely!