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 December 10 2024
Erik Schafhauser
Senior Relationship Manager
Summary: China...
Good morning,
China was the main market driver yesterday with three announcements:
- it will adopt an "appropriately loose" monetary policy next year – this is the first easing of its stance since 2010. This implies strong stimulus measures.
- Nvidia is under investigation for a possible violation of the Antimonopoly law
- The trade balance rose again, exports rose only 6.7% vs expected 8.5%, Imports fell by 3.9% against an expectation of 0.3%.
The first news along the announcement that Chia continued it`s Gold purchases in November boosted Gold to 2670 and Silver to now 31.95. The Silver chart is interesting as we broke the 50 day moving average but failed to break the 50% retracement of the recent decline.
The Investigation into Nvidia triggers some fear letting the stock fall by 2.5%, at the same time, AMD came under pressure due to an unfavorable research report and Comcast was under pressure due to falling subscribers. Significant gainers were Hershey and Workday.
The Vix gained more than 10%, Indexes gave up app. 0.5, with China/ Hong Kong the exception, we are giving up app 1% after strong gains yesterday. The US 500 is 6050, the US 40 44.400 and the Ger40 20300.
The US Dollar Index is holding above the 106, 10 Year Yields are below 4.2% at 4.18. In Europe the spread between the German and French yields seem to have stabilized.
Highlights this week will be the US CPI tomorrow and the Swiss and EU Rate decisions Thursday, there will be no comments from Fed speakers as they are in Lockdown due to the rate decision next week.
As of now, the ECB will cut 25 BPS with a probability of 82%, the SNB 50 BPS with 57%.
While developments in Syria so far have not moved markets significantly, developments in the area could turn volatile at any point in time.
Trade safely!!
Tuesday
- Data DE, DK, NO CPI, China trade balance
Wednesday
- Data US CPI, Bank Of Canada Rate Decision
Thursday
- Data AU Employment Data, Sweden CPI, Swiss Rate Decision, ECB Rate Decision, Initial Jobless Claims,
Friday
- Data Japan Tankan, France CPI,
FPZ4 will expire on 11/dec at 1600 hrs
JGB1Z4 will expire on 12/dec at 1600 hrs
Currency Futures on Friday at 16:00
Expiring CFDs
GASOILUKDEC24 will expire on 10/dec at 1600 hrs
USDINDEXDEC24 will expire on 12/dec at 1600 hrs
EMISSIONSDEC24 will expire on 12/dec at 1600 hrs
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