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 March 24 2023
Erik Schafhauser
Senior Relationship Manager
Summary: Reorientaion
Good Morning,
e seem to be in a bit of a consolidation phase where traders and investors are trying to decide what exactly is on and what is driving markets from here.
Key rate decisions are off the table for the next few weeks – Australia and New Zealand are the next significant ones in early April.
We have the recession worries, the banking crisis, Inflation, Geo-Politics, the US Debt ceiling and not least liquidity to keep us busy all the while the coffers remain filled and dips continue to be bought.
Traders should feel at home here as markets from Equities to FX are moving nicely and there are opportunities everywhere – for investors it is a bit more nerve wrecking and hedges or yield enhancing strategies are worth considering.
Most Indexes are a bit in limbo and need a push to find a clear direction, 2 year yields remain low as traders don`t trust the feds view that rates would not be cut this year and this keeps the USD under pressure and trading fairly wildly. The Average true range of EURUSD – basically the daily range the cross moves) is 50% above the level from early March. We were moving app 70 pips early March, now 110. GER40 moves app 250 points on average and is currently at 380.
Gold and Silver profit from the insecurity on the one hand and the weak USD on the other, Gold remains near the 2000 and Silver has broken above 23 again.
While todays agenda is quite full, I expect the market to me more news driven aspecially around the Banking crisis in the US and comments out of the Fed
Friday 24 March
- US Durable goods orders (Feb)
- US S&P manufacturing PMI (Mar. preliminary)
- Eurozone PMI composite (Mar)
- Germany PMI composite (Mar)
- France PMI composite (Mar)
- UK GfK consumer confidence (Mar)
- UK UK Retail sales (Feb)
- UK PMI composite (Mar)
- Japan National CPI (Feb)
- Japan PMI manufacturing (Mar)
- Malaysia\ CPI (Feb)
- Singapore Industrial production (Feb)
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