Quarterly Outlook
Macro Outlook: The US rate cut cycle has begun
Peter Garnry
Chief Investment Strategist
Senior Relationship Manager
Good Morning,
A higher than expected Payroll let worries of a 75 basis point hike increase, US Yields jumped higher across the board, strengthened the US and weighed on stocks. Over the weekend we are seeing some recovery. The USD Index traded as high as 106.93 on Friday and receded to 106.50 now. The 2 / 10 year spread in the US Yields hit 40 basis points.
EURUSD hit 1.0140and gained to 1.0185. GBPUSD 1.2003/ 1.2080 and USDJPY 135.50/135.30. Gold and Silver fell to 1765 and 19.55 before recovering to 1775 and 19.92.
Indexes fell moderately as the stronger than expected labor market and the rate fears offset one another. The S&P 500 declined 0.15%, the Dow Jones gained 0.23% and the Nasdaq declined by 0.5%.
The US Senate approved Bidens spending bill to the tune of USD 430 Billion, a major democratic win.
Tensions around Taiwan remain high as China extends it`s military drills and Taiwan also announced military exercises while in Ukraine fighting around the Zaporizhzhia Nuclear Power plant continues as major causes for concern.
Chinese trade data came high than expected yesterday with exports up 18% vs 15 expected.
Moody's had cut Italy's outlook to negative after the resignation of Mario Draghi
SoftBank posted a loss of USD 23.37 billion in the first Japanese Quarter form April to June.
This week starts with little economic data of high significance, the US productivity data tomorrow and the Chinese , German and US Inflation data on Wednesday will be watched carefully for hints on the path of the central banks.
Trade safely
Key Earnings:
Expiries