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 September 11 2023
Erik Schafhauser
Senior Relationship Manager
Summary: Busy Week Ahead
Good Morning
Due to private travels and events, this is the only Morning brew this week so I try to highlight the coming events.
Last Week, Indexes lost overall with the S&P 500 at -1.3%, the Dow at -0.75% and the Nasdaq -1.93% but Friday was a fairly uninspired day with low volumes.
Over the weekend, Risk sentiment stabilizes with Equity Futures recovering and the USD giving up some ground. EURUSD rose to 1.0730, GBPUSD rises to 1.2520 and USDJPY falls ot below 146 on remarks by BoJ Governor Ueda that the central bank could end its negative interest rate policy when the 2% inflation target is in sight. Gold and Silver recover to 1927 and 23.08 while Indexes gain between 0.2-0.4%. The Yuan recovered from it`s 16-year low of 7.3510 per dollar on Friday to 7.3188.
This week we are expecting a lot of economic data the US CPI and PPI key along the ECB rate decision on Thursday along the Press conference. The ARM IPO and Apple will be closely watched as well, the IPO will be a great test of sentiment while Apple will hold the Keynote on the one hand and seems to be the center of a possible trade/ Sanction standoff between the US and China.
The ECB is currently expected to take no action with a probability of 58% so that could be a close one. The peak ECB rate is currently seen in December, 18 basis points above the current level, over 2024 2 cuts are priced in.
The Fed will most likely not take any action next week – no change is seen with a 93% probability.
Trade safely, it feels there is more event risk around than is being priced in in my view.
Monday
- Norway CPI 3, 6 month and 3 Year Bond Auction,
Tuesday
- Data: UK Labor Data, Norway GDP, Spain CPI, German ZEW, US 10 Year Bond Auction
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Wednesday
- Data UK GDP, HK PPI, EU industrial Production. US CPI, 30 Year Bond Auction
Thusday
- Data AU Unemployment rate, Sweden CPI, ECB Rate decision, US PPI, Retail Sales.
Friday
- Data AU PMI, China, Urban Output & Retail Sales, EU Trade Balance, US NY Fed, Industrial production.
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