Chief Investment Officer
Instrument: EURUSD
Price Target: 1.1450
Market Price: 1.1665
As highlighted this morning, there is some “rain in Spain”. First, Zidane resigns, and now prime minister Rajoy looks to be 'former PM Rajoy' by tomorrow night.
As it happens, I just had a chat with a journalist in Spain. The takeaway surrounding the country's preparing for a Friday vote of No Confidence in prime minister Mariano Rajoy's government?
• This is bad; it creates more uncertainty.
• If the motion caries it will be the first time in Spanish history that a sitting government falls on a vote.
• The Socialists will form government; they have bizarrely decided to “keep” the Conservative budget if they oust Rajoy.
Entry: 1.1665
Stop: 1.1750
Target: 1.1450
Time Horizon: medium term.
The vote is tomorrow, and the market remains relatively muted for now. The event risk is the actual vote... but the likelihood is that EURUSD sells off.
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.
