Michael McKenna
Head of Editorial Content, Saxo Bank
Saxo Bank head of equity strategy Peter Garnry is bullish the three big banks – JPMorgan, Wells Fargo, and Citi – reporting earnings ahead of today's US open. Citing expectations for strong trading income and commercial banking results, Garnry says that he could see equities rally throughout the earning season provided the negative macro surprise trend eases and there are no major new provocations on the political (read: President Trump) front.
In single shares, Garnry reports that British Airways parent IAG has taken a 4.6% stake in low-cost carrier Norwegian, boosting shares of the latter by 46% on speculation of an acquisition (IAG already owns low-cost carrier Vueling, as well as Aer Lingus and Iberia).
Saxo's equities head says that he fails to see the big synergies here and is surprised by the timing of the IAG bid.
In the FX space, Saxo Bank head of forex strategy John Hardy reports that EURGBP is in focus on what appears to be a major flow/technicals-driven drop below key support around 0.87, with Thursday's close around 0.8660 having the potential to open up room for a more protracted fall towards major support around 0.8300-0.8325.
They key upcoming factors here, Hardy says, are next week's UK data releases, which include producer prices and inflation prints on April 18.
Hardy also notes the yen's continued weakness with USDJPY pushing on resistance at 107.50 for a potential re-entry into the Ichimoku cloud above 108.00. In his view, the USDJPY rally does not yet look to be particularly dramatic but could extend if the current swell in risk appetite – due partially to President Trump's unexpected reversal on the Trans-Pacific Trade partnership – continues in the short- to medium-term.
2024: The wasted year
Markets are driven by election optimism, overshadowing growing debt and liquidity concerns. The 2024 elections loom large, but economic fundamentals and debt issues warrant cautious investment.
As US economic slowdown hints at a shift away from exceptionalism, USD faces downside with looming Fed cuts. AUD and NZD set to outperform as their rate cuts lag. JPY gains on carry unwind bets and BOJ pivot.
Amid AI and obesity drug excitement, equities see varied prospects: neutral on overvalued US stocks, negative on Japan due to JPY risks, positive on Europe. European defence stocks gain appeal.
With the economic slowdown, quality assets will gain favour, especially sovereign bonds up to 5 years. Central banks' potential rate cuts in Q2 suggest extending duration, despite policy and inflation concerns.
Commodities poised for rebound. The "Year of the Metal" boosts gold and silver, copper awaits rate cuts. Grains may recover, natural gas stabilises. Gold targets $2,300-$2,500/oz, copper's breakout could signal growth.
Markets are driven by election optimism, overshadowing growing debt and liquidity concerns. The 2024 elections loom large, but economic fundamentals and debt issues warrant cautious investment.
As US economic slowdown hints at a shift away from exceptionalism, USD faces downside with looming Fed cuts. AUD and NZD set to outperform as their rate cuts lag. JPY gains on carry unwind bets and BOJ pivot.
Amid AI and obesity drug excitement, equities see varied prospects: neutral on overvalued US stocks, negative on Japan due to JPY risks, positive on Europe. European defence stocks gain appeal.
With the economic slowdown, quality assets will gain favour, especially sovereign bonds up to 5 years. Central banks' potential rate cuts in Q2 suggest extending duration, despite policy and inflation concerns.
Commodities poised for rebound. The "Year of the Metal" boosts gold and silver, copper awaits rate cuts. Grains may recover, natural gas stabilises. Gold targets $2,300-$2,500/oz, copper's breakout could signal growth.