Quarterly Outlook
Fixed Income Outlook: Bonds Hit Reset. A New Equilibrium Emerges
Althea Spinozzi
Head of Fixed Income Strategy
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Morning Brew July 27 2021
Erik Schafhauser
Senior Relationship Manager
Summary: Looking for the "Next Big Thing"
Good Morning,
My colleagues summarized the current trading and investment environment best titling yesterday’s Podcast If you’re not confused, you’re not paying attention.
Every clear signal that appears seems to be nullified shortly thereafter. Yesterday we saw precious metals under pressure, indicating the start of a bearish trend, then a sharp reversal brought Gold to close above the key support and Silver to 25 again. Equities sold off sharply on a weak outlook by UPS caused it`s shares to drop by 10%. Indexes lost: Dow 1.02%, the S&P 1.58% and the Nasdaq 1.98%. After the bell, strong results by Microsoft and decent ones and a stock buyback of Alphabet caused Equities to bounce off the lows, Microsoft shares rose 8% after the bell and Google 2.5%.
US 2 year yields fell below 4% yesterday but the USD Index rose to near 102 despite that, this was mainly caused by EU Yields also dropping and EURUSD to drop from 2.95 to 2.75. EURUSD is at 1.0988, GBPUSD at 1.2425, USDJPY at 133.70 Gold 1996 and Silver 25.00. EURCHF trades at 0.9790.
While USDJPY is currently rangebound, the first meeting under the new governor Ueda is kicking off. No change in rates is expected but focus is on the way he communicates on the one hand and his forward guidance on the other. No Change in rates is traded with a probability of 98%.
US consumer confidence falls to 9-month low in April yesterday while the German one came less horrible than feared at -25.7 vs an expectation of -27.9.
Today there is the US Durable goods orders and Meta Earnings to move the markets unless there is a significant surprise.
Traders as well as Investors continue to look for clues about the next market driver for a clear direction.
Economic Data:
Australia Trade Data,
Sweden Rate Decision
France Unemployment
US Durable Goods
Earnings: Boeing, General Dynamics, Meta, Roku, Enovics,
Thursday
Economic Data:
Sweden GDP,
EU Consumer Confidence
Turkey Rate Decision
US GDP Advance, Initial Jobless claims
Earnings: American Airlines, Caterpillar, Mastercard, Merck ,Amazon, Intel, Pinterest, Gilead, Amgen,
Friday
Economic Data:
Swiss KOF
Germany Unemployment, GDP
EU GDP
US PCE, University of Michigan,
Canada GDP
Earnings:
ExxonMobile, Colgate,Cameco,
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