Morning Brew September 26 2023
Senior Relationship Manager
In 2014 a severe Euro weakness caused the Dollar Index to gain 11 weeks in a row, that was the only instance in history that happened – it looks like it could happen again on the current yield driven strength of the USD.
Fairly hawkish comments by the Feds Kashkari and Goolsbee pushed the long end of the curve higher and the USD followed. The USD Index rose to above 1.06 as the 10 year Yield hit 4.54. EURUSD Fell to below 1.06 to 1.0580, GBPUSD is trading just below 1.22 and USDJPY is testing the 1.09. Gold and Silver fell to 1915 and 22.90.
Our Charu comments: King dollar remains heavily in demand, being the only relief in portfolios with both equities and bonds down. Momentum is likely to continue until US economic data or events signal risks to spending into Q4. We highlight the "Three S" risks stacking up into next week coming from student loan repayments, strikes and shutdown. These could make Gold outperform, but any hit to the USD will remain temporary for now. EUR and JPY face a double whammy of risks from USD strength and rising oil prices, while CAD outperformance continues.
US Shares gained yesterday and Indexes closed green, the Dow +0.13%, the US 500 0.4% and the Nasdaq +0.45%. Over night, the gains have been already given up and the US 500 is trading at 4322, the US tech 100 NAS at 14707, the GER40 15380. In perspective, the S&P 500 is down app 5.5% since late July but remains up about 13% for 2023. Volumes remain low as traders are looking for clues at 9 billion, yesterdays volume is app 1 billion below the 20 day average.. Our Kim Cramer took a look at key technical of US tech stocks here
The Debt ceiling remains in focus as Moody's warns US government shutdown bad for country's credit and negotiations about a stopgap remain nervous.
China Evergrande remains under pressure, dropping as much as 8% after a unit of the embattled property developer missed an onshore bond repayment.
- Data: Japan PPI, US Consumer Confidence, New Home Sales
- Data US Durable Goods,
- Data Australia Retail Sales, EU Consumer Confidence, DE CPI, US GDP, Initial Jobless Claims,
- Data Japan CPI, UK GDP, Swiss KOF; DE unemployment, EU HICP, US PCE, University of Michigan
Physically Settled Futures
- NGV3 will expire 26 Sep 2023 at 07:30 GMT
- TTFMV3 will expire 27 Sep 2023 at 09:00 GMT
- CHINA50SEP23 will expire 27 Sep 2023 at 02:00 GMT
- GASOLINEUSOCT23 will expire 27 Sep 2023 at 15:00 GMT
- GOLDOCT23 will expire 27 Sep 2023 at 15:00 GMT
- HEATINGOILOCT23 will expire 27 Sep 2023 at 15:00 GMT
- SOYBEANMEALOCT23 will expire 27 Sep 2023 at 15:00 GMT
- SOYBEANOILOCT23 will expire 27 Sep 2023 at 15:00 GMT
- SUGARNYOCT23 will expire 27 Sep 2023 at 15:00 GMT
- TAIWAN95SEP23 will expire 27 Sep 2023 at 02:00 GMT
- HK50SEP23 will expire 28 Sep 2023 at 02:00 GMT
- SINGAPORESEP23 will expire 28 Sep 2023 at 02:00 GMT