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 May 8 2024
Erik Schafhauser
Senior Relationship Manager
Summary: Heading Into Ascension day
Good morning,
This is the last morning brew this week, the next one will follow Monday.
US Equities moved little yesterday looking at the Indexes, the S&P 500 and the Dow rose by 0.1%, the Nasdaq 100 slightly in the red. Disney fell 9.5% Palantir 15% and Tesla 3.8% on weak reports, Apple could rise slightly after the release of new iPads and announcements of an own AI Chip.
A bit curiously, European equities rose more with the dovish fed being cited as the reason, the Ger40 has the 18500 in reach after the index gained 1.4%. Infineon and Zalando at +12.9% and +8.5%.
UBS gained nearly 8% on the strong result yesterday.
This morning Toyota announced profits more than 80% higher in Q4 but an expectation of 20% lower full year profit.
With the economic calendar rather empty, Neil Kashkari`s hawkish comments the Fed may need to hold rates steady for the remainder of the year due to stalled inflation and housing market strength, were focused on.
10 Year yields are stable at below 4.5% and the USD Index a little higher at 105.57. The Yen remains wekk despite BoJ warnings. If you want to trade the Yen, expect sharp moves at any point in time. We are now 155.20. EURUSD is 1.0740 and GBPUSD 1.2490.
Gold and Silver are 2320 and 27.40 looking for the next real move, and Copper remains in focus on AI and Green Transition demand being speculated on.
The remainder of the week holds little in terms of key data but potential for volatility from Geopolitics and low liquidity offering opportunities to shift the market – the BoJ is the most likely, but we have also seen huge moves in precious metals into Fridays close or early Sunday.
Trade safely!
Wednesday
- Data Sweden Rate decision
- Earnings: Itochu, Toyota, BMW, AirBnB, Uber, Anheuser Bush Inbev, Shopify, Emerson ,
Thursday
- Data US Initial Jobless Claims, China Trade,
- Earnings: Enel, Softbank, Brookfield,
Friday
- Data University of Michigan
- Earnings:NTT, Honda, KDD, Tokyo Electron.
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