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 January 16 2024
Erik Schafhauser
Senior Relationship Manager
Summary: Yields Pop on ECB Hawks - Waller to confirm?
Good Morning
After an initially calm day yesterday, hawkish comments out of Davos caused yields to rise, the USD to gain and Equities to slide.
The German and Austrian Central Bank Heads stated it was too early for rate cuts and eyes are now turning to the speech of Christoph Waller. He was a key cause in market expectations turning so dovish in November. He is speaking at 17:00 today.
As of now, we still see an expectation of more than 6 rate cuts in the US this year (-160 bps) and slightly less than 6 in the EU (-145 bps)
US 10 Year Yields rose to 4%, pulling the USD Index to 102.95. EURUSD fell to 1.0913, GBPUSD 1.2680 and USDJOY rose to above 146 to trade at 146.20. Gold and Silver fell to 2048 and 23.05, Bitcoin is relatively stable to 42650.
Equity Indexes are trading lower with the US 500 at 4760, the US Tech 100 NAS 16730 and the GER40 16530.
Koen issued a new volatility report: and Ole his Commitment of Traders
Today will be an interesting day with German and Canadian Data, The Waller Speech at 17:00 CET as likely the key event and some important earnings. The Middle East remains extremely dangerous with Hamas confirming the execution of hostages while the Houthi rebels attack ships in the Red Sea.
The WEF in Davos will formally begin today and we can expect market moving comments
Have a successful day!
Tuesday
- Data Germany HICP & ZEW, Canada CPI,
- Earnings: Goldman Sachs, Morgan Stanley, Interactive Brokers,
Wednesday
- Data China GDP, Retail Sales, UK CPI, EU HICP, US Retail Sales,
- Earnings: Alcoa, Charles Schwab, US Bancorp,
Thursday
- Data Initial Jobless Claims, Philly Fed,
- Earnings: TSMC,
Friday
- Data Japan CPI, UK Retail Sales EU Consumer Confidence,
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