Quarterly Outlook
Macro outlook: Trump 2.0: Can the US have its cake and eat it, too?
John J. Hardy
Global Head of Macro Strategy
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Morning Brew March 10 2023
Erik Schafhauser
Senior Relationship Manager
Summary: Key day - Watch US Data at 14:30CET to make or break the week
Good Morning,
Today is starting to look like a crucial day for traders. As our Steen Jacobsen points out, it is uncommon that there is a very strong market move ahead of key data and yesterday was certainly an outlier:
Yesterday, the US Bank index fell 6.6% on issues at SVB. The Bank announced a share sale to boost it`s balance sheet after suffering heavy losses in a bond portfolio. and the group lost 60? of value. This dragged indexes lower overall and the Dow fell 1.85%, the S&P 1.66%, and the Nasdaq 2.05%. Shares of crypto-focused companies fell as well after Silvergate Capital Corp announced to wind down operations. Bitcoin fell below 20 again.
The Dow broke support at 32.550… and with RSI below 40 indicating a short position is confirmed.The US500 has broken the 200d MA to the downside and it will be key to see where we end the week. The Swiss SMI broke below support as outlined here. 10,659 is key support ahead of the 10.000 level.
Our Peter Garnry put out an interesting article on Tesla and the heat pump market, nevertheless Tesla lost 5%, Netflix 4.5%, Nvidia 3%.
US 10 year yields fall to below 5% on demand for safety to now trade at 4.8%. The probability of a 50 BPS hike has fallen to 50% from 80 yesterday.
The USD Index falls to 105.30 with EURUSD at 1.0580, GBPUSD at 1.1940 and USDJPY 136.70. CHF rises against USD as well as EUR to 92.90 and 98.40.
Gold and Silver remain undecided, at 1831 and 20.03, pls see our Kim Cramers technical outlook here
The key today will be the Nonfarm payroll and the big question on it`s effect on sentiment. Traders will watch:
- The Nonfarm Payroll expected at 205k. This is the key number that will be watched initially. A higher number will weigh on risk sentiment and a lower would boost it.
- Unemployment rate expected at 3.4% is the second look. A higher number would be good for risk sentiment as it gives the fed reason to be dovish and to claim success.
- Average earnings are expected up 0.3% and thus only slightly inflationary.
- An revision of last months data
Think hard on how much risk you want to carry in to a day like today and trade safely
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