Macro: Sandcastle economics
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Morning Brew June 24 2021
Erik Schafhauser
Senior Relationship Manager
Good Morning
Strong economic data and hawkish messages from the Fed are putting investors and traders on edge. Initially the strong PMIs drove risk sentiment yesterday, Equities, EUR, Gond and Silver could gain but hawkish comments out of the fed brought us back to similar levels we traded yesterday morning. The Dow closed -0.21%, the S&P 500 -0.11% and the Nasdaq +0.13%. Dax trades at 15500, the USD Index 91.82, US 10 Year rates at 1.49 and Bitcoin at 32636. Gold and Silver tried to break higher yesterday but failed to hold on to the gains, watch for the 200d MA in Silver at 25.70.
Atlanta Fed President Raphael Bostic and Fed Governor Michelle Bowman both hinted at the inflation – while temporary – would remain longer than previously thought and that rate hikes may be necessary in 2022 not 2023. Janet Yellen expects inflation to normalize next year. I would expect the tapering discussion to gain traction soon if data remains as strong.
- The Biden administration banned U.S. imports of a key solar panel material from Hoshine Silicon Industry Co over forced labor allegations.
- In August the US will face default risk once again unless the debt ceiling is raised.
- Tesla rallies 5.3% after opening solar charging station.
- John McAfee was found dead after his extradition to the US was approved.
- Fannie Mae stocks and Freddie Mac drops more than 25% after the US Supreme Court rejects investor statutory claims against the companies.
- Brazil reports the highest number of Covid infections ever with more than 115k
Todays Key Events are the German IFO Index at 10:00 CET, the BOE at 13:00 CET and US Data at 14:30, any hint at still rising inflation may pressure the FED to commit.
In the BOE Rate decision at 13:00, no rate change is expected (Probability 99%) but the two focus points will be the Central Banks stance on the QE Program and any hint at a shift in the schedule of interest rate increases, currently expected for May 22. Any surprise here can cause sharp moves in GBP Crosses.
Local Start Date | Local Time | Country/Region | Indicator Name | Period | Reuters Poll | Unit |
24 Jun 2021 | 06:30 | Netherlands | GDP Final SA QQ | Q1 | -0.5% | Percent |
24 Jun 2021 | 06:30 | Netherlands | GDP Final NSA YY | Q1 | Percent | |
24 Jun 2021 | 08:00 | Germany | Import Prices MM | May | Percent | |
24 Jun 2021 | 08:00 | Germany | Import Prices YY | May | 11.3% | Percent |
24 Jun 2021 | 08:45 | France | Business Climate Mfg | Jun | 110 | Net balance |
24 Jun 2021 | 09:00 | Spain | GDP QQ | Q1 | -0.5% | Percent |
24 Jun 2021 | 09:00 | Spain | GDP YY | Q1 | -4.3% | Percent |
24 Jun 2021 | 10:00 | Germany | Ifo Business Climate New | Jun | 100.1 | Index |
24 Jun 2021 | 10:00 | Germany | Ifo Curr Conditions New | Jun | 97.5 | Index |
24 Jun 2021 | 10:00 | Germany | Ifo Expectations New | Jun | 103.5 | Index |
24 Jun 2021 | 13:00 | United Kingdom | BOE Bank Rate | Jun | 0.10% | Percent |
24 Jun 2021 | 13:00 | United Kingdom | GB BOE QE Corp | Jun | 20B | GBP |
24 Jun 2021 | 13:00 | United Kingdom | BOE MPC Vote Hike | Jun | 0 | Number of |
24 Jun 2021 | 13:00 | United Kingdom | BOE MPC Vote Unchanged | Jun | 9 | Number of |
24 Jun 2021 | 13:00 | United Kingdom | BOE MPC Vote Cut | Jun | 0 | Number of |
24 Jun 2021 | 14:30 | United States | Durable Goods | May | 2.7% | Percent |
24 Jun 2021 | 14:30 | United States | Durables Ex-Transport | May | 0.7% | Percent |
24 Jun 2021 | 14:30 | United States | GDP Final | Q1 | 6.4% | Percent |
24 Jun 2021 | 14:30 | United States | GDP Deflator Final | Q1 | 4.3% | Percent |
24 Jun 2021 | 14:30 | United States | Core PCE Prices Fnal | Q1 | 2.5% | Percent |
24 Jun 2021 | 14:30 | United States | Initial Jobless Clm | 19 Jun, | 380k | Person |
24 Jun 2021 | 14:30 | United States | Cont Jobless Clm | 12 Jun, | 3.458M | Person |
25 Jun 2021 | 00:45 | New Zealand | Imports | May | NZD | |
25 Jun 2021 | 00:45 | New Zealand | Trade Balance | May | NZD | |
25 Jun 2021 | 00:45 | New Zealand | Annual Trade Balance | May | NZD | |
25 Jun 2021 | 00:45 | New Zealand | Exports | May | NZD |
(Refinitiv)
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