Quarterly Outlook
Fixed Income Outlook: Bonds Hit Reset. A New Equilibrium Emerges
Althea Spinozzi
Head of Fixed Income Strategy
You can access both of our platforms from a single Saxo account.
Morning Brew April 4 2024
Erik Schafhauser
Senior Relationship Manager
Summary: Metals the Stars of the moment
Good morning,
Yesterday the EU unemployment rate came higher than expected at 6.5% vs 6.4% but inflation lower at 2.9) vs 3%. The US Manufacturing PMI came above the important 50 line but below the expected 52.7 at 51.4. Jerome Powell spoke in relatively hawkish tones saying economic data and inflation were both higher than expected and there was more debate needed before cutting rates.
Rate traders nevertheless continue to price in almost three rate cuts – in December the implied rate is 70 bps below the current level. The ECB, seen to cut 90 BPS this year will set rates next week but there is only a 13% chance they will take any action.
10 Year yields moved little and remained at 4.36 but he USD Index remained under pressure and is currently 104.16
EURUSD rose to 1.0844, USDJPY is stuck just below 152 at currently 151.66 – It seems the BoJ has cried Wolf too often and traders are not convinced they are really willing to take any action. Cable rose to 1.2655.
Indexes were at a loss on what to do and basically froze in place. The Dow lost 0.1%, the S&P 500 lost the same and the Nasdaq gained 0.2% in slightly below average volumes. Big Outliers were Intel at -8% after a larger than feared loss and Ulta Beauty at -15%.
Gold and Silver are the stars of the moment with silver at 27 and Gold at 2296. We bow our heads to Ole and the strats team who called it – targets are still 2500 and 28 – maybe not in as straight a line as we have seen the last few days. Silver is up 10% in ta week and God more than 5%. Copper is at a 13-month high!
If you have enjoyed the ride, consider your strategy from here in case there is an adverse move.
Bitcoin is once again in a sideways move at 65k.
Today we are expecting some economic data, The EU Composite PMI is seen to come at 47.4, US Initial Jobless Claims are expected at 214k. Next to that, there are a lot of US Central Bankers speaking in the European evening. NATO celebrates its 75 year anniversary. Tomorrow, the US labor market data will be released as the weeks highlight.
Q2 is certainly off to an interesting start.
Thursday
- Data More PMI, initial Jobless claims, Barkin speaks,
Friday
- Data: De Industrial Orders, US Nonfarm Payroll, Unemployment Rate
Latest Market Insights
Quarterly Outlook
-
-
Quarterly Outlook
Equity Outlook: Will lower rates lift all boats in equities?
Peter Garnry
Chief Investment Strategist
After a period of historically high equity index concentration driven by the 'Magnificent Seven' sto... -
Quarterly Outlook
FX Outlook: USD in limbo amid political and policy jitters
Charu Chanana
Chief Investment Strategist
As we enter the final quarter of 2024, currency markets are set for heightened turbulence due to US ... -
Quarterly Outlook
Macro Outlook: The US rate cut cycle has begun
Peter Garnry
Chief Investment Strategist
The Fed started the US rate cut cycle in Q3 and in this macro outlook we will explore how the rate c... -
Quarterly Outlook
Commodity Outlook: Gold and silver continue to shine bright
Ole Hansen
Head of Commodity Strategy
-
Quarterly Outlook
FX: Risk-on currencies to surge against havens
Charu Chanana
Chief Investment Strategist
Explore the outlook for USD, AUD, NZD, and EM carry trades as risk-on currencies are set to outperfo... -
Quarterly Outlook
Equities: Are we blowing bubbles again
Peter Garnry
Chief Investment Strategist
Explore key trends and opportunities in European equities and electrification theme as market dynami... -
Quarterly Outlook
Macro: Sandcastle economics
Peter Garnry
Chief Investment Strategist
Explore the "two-lane economy," European equities, energy commodities, and the impact of US fiscal p... -
Quarterly Outlook
Bonds: What to do until inflation stabilises
Althea Spinozzi
Head of Fixed Income Strategy
Discover strategies for managing bonds as US and European yields remain rangebound due to uncertain ... -
Quarterly Outlook
Commodities: Energy and grains in focus as metals pause
Ole Hansen
Head of Commodity Strategy
Energy and grains to shine as metals pause. Discover key trends and market drivers for commodities i...