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 November 13 2024
Erik Schafhauser
Senior Relationship Manager
Summary: US CPI out today - Who cares?
Good morning,
It looks like the Trump Trade is facing a showdown between yields and stocks. Increased spending and less regulation boosts equities but also fuels inflation and causes rising yields. With the 2 year at 4.35 and the 10 year at 4.44, stocks seem to feel pressure, the US dollar gets boosted .
Today we are expecting the US Consumer Price Index at 14:30 CET. The CPI is seen at 2.6%, the Core at 3.3%. The big question will be if the focus will be on this data point of on any announcement by the Team Trump.
Donald Trump announced Elon Musk and Vivek Ramaswamy will lead the Department of Government Efficiency, with the aim to "drive large scale structural reform, and create an entrepreneurial approach", Fox host Pete Hegseth will be Secretary of Defence. He is a vet having served in Afghanistan.
Fed speakers basically said the Fed was still somewhat restrictive but ready to act if necessary.
European gave up 2% as the ECB expressed worries, increased tariffs would hamper global growth, also Ford announced to cut working hours to every other week at the cologne facility. The Dax is seen at around 19000. The Nikkei also gives up 2%.
US indexes traded lower as well, the Dow lost 0.85%, the S&P 500 0.3% the Nasdaq 0.1% and the Russel gave up 1.8%. Volumes remained high at above 15 billion shares.
Tesla lost 6% but remains up 35% since the election, Amgen gave up 6% on possible issues with it`s weight loss drug.
The USD Index is trading at 106, EURUSD 1.0610, USDJPY 155, GBPUSD 1.2740 and Gold and Silver 2605 and 30.85. For now, the key supports in Gold and Silver seem to have held but the longer uptrend remains at risk is there is more downside.
Bitcoin it taking a breath at 86700 having looked above the 90k yesterday.
In this week’s Saxo Market Call, Søren Otto is joined by Chief Macro Strategist, John J. Hardy and Head of Fixed Income, Althea Spinozzi to take the temperature of the markets one week removed from the US election. They dive deep into how bond markets, Bitcoin craze and the newly called German election.
Listen to the full episode now or follow Saxo Market
Pls see the shortlist for the Trump Trade here
Highlights are: Transport & Logistics, Financials, Energy and small caps
Key events
Wednesday
- Data US CPI,
- Earnings: Cisco,
- Logan, Musalem, Schmid, speak
Thursday
- Data Sweden CPI, EU GDP, US Initial Jobless claims, PPI
- Earnings: Disney, JD.com
- Barkin, Kugler, Powell speak
Friday
- Data JP GDP, UK GDP, US Retail Sales
- Earnings, Alibaba
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