Morning Brew September 8 2023
Erik Schafhauser
Senior Relationship Manager
Good Morning
Fed speakers were less hawkish than feared after the low initial jobless claims. 1o Year Yields fell from above 4.30 to 4.22 causing the US Dollar to give up some of it`s gains. The USD Index receded from 5 to 4.85, EURUSD retook the 1.07, GBPUSD is near 1.25 at 1.2490 and USDJPY off the highs at 147.17. Gold and Silver recovered to 1924 and 23.05. The Chinese Yuan fell to a 16 year low against the USD yesterday. Ole wrote on Gold and silver stating he sees the current selloff as a setback on the way up
Apple was the key stock yesterday as speculations, China might extend the use of Iphones to more employees than previously feared. In the last quarterly report, Greater China accounted for 19% of Apples sales so this is not trivial. Apple has lost 200 billion in Market Cap over the last two days as the stock lost app. 3% yesterday. Kim points out that from a technical level, big tech is not pretty
Also suppliers and likely targets of a US retaliation against the Chinese measures lost yesterday – JD.com, and Baba lost more than 4% That aside, equities were fairly quiet. The Dow gained 0.17% in the end, the S&P500 lost 0.32% and Nasdaq lost 0.9%.
With only 9.75 Billion stocks traded, the stock markets looks a little like a deer in the headlights…
Oil prices gave up some ground, but remain on track for a weekly gain after production cuts from Saudi Arabia and Russia.
The LNG Market will be hit by strikes at Australian projects responsible for 5% of the worlds LNG production and if Chevron is not able to find personnel to fill the gaps, this could disrupt production.
In the night, the Japanese GDP disappointed and we have little key data on the Agenda. Most important will be the German inflation at 8 and Canadian labor market data. Next week will be much more busy with the US CPI, PPI and the ECB the highlights.
As the Fed states to be data dependent the inflation data will be closely watched. There is currently a 65% probability that the ECB will leave rates unchanged next Thursday. The Arm IPO will be a major event and Peter will write his take on it today.
The G20 summit is on in India and could be important if there are any surprises.
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