Macro: Sandcastle economics
Invest wisely in Q3 2024: Discover SaxoStrats' insights on navigating a stable yet fragile global economy.
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Summary: Nervous start to the earnings Season due to gas cuts in Europe and recession fears
Good Morning,
Equities closed little moved on Friday, with US Indexes all within 0.2%. The Nonfarm payroll beat expectations and unemployment remained low.
This morning nervousness prevails, the Dax is indicated down 1.5% and US Futures app 1%, the USD Index rises to 107.40 with EURUSD at 1.0140 and GBPUSD sub 1.20. The Euro is weighed down by rising fears of a recession and a rising trade deficit. Economists expect a German recession with a probability of 55%, EU wide 45%.
The Japanese LDP won yesterdays election and indications that the loose monetary stance will be maintained let the yen fall to the lowest level this century. Haruhiko Kuroda on Monday warned of "very high uncertainty" over the economic outlook The next significant levels are north of 140, currently 137.20.
Bitcoin loses 6%, Gond and Silver are fairly stable at 1740 and 19.18.
Germany announced that at the moment no gas is being delivered through the Nordstream 1 pipeline, this was not unexpected but the worry is that the deliveries do not pick up after the scheduled maintenance.
Credit Suisse credit default spreads rise to the highest level since the global financial crisis at 205.
Elon Musk announced Friday to withdraw from the Twitter purchase and it looks like an interesting legal battle coming up. Twitter hired a law firm while Elon Musk tweeted he was building a litigation department and asked for resumes.
Macau ordered Casinos to close due to Corona numbers
Economic Data this week will be the ZEW Tomorrow, Chinese Trade data on Wednesday, followed by the UK GDP and German CPI, EU industrial Production and the US CPI as most important event of the week, Thursday the US PPI and Friday Chinese Retail sales and GDP, US Retail Sales and the University of Michigan.
On Wednesday the Bank of Canada s well as the Royal Bank of New Zealand will announce rates, both are expected to hike, the RBNZ by 0.5% and the BoC by 0.75%.
The earning season kicks off with moderate expectations, earnings are expected to grow by 6% in the 2nd Quarter for the S&P 500.
Please see Peters preview here: Q2 earnings preview, biotechnology breakout
Trade cautiously!