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 7 2023
Erik Schafhauser
Senior Relationship Manager
Summary: Digesting the new reality
Good Morning
Yesterday, traders were trying to digest the last week in what was quite honestly a fairly dull day. Indexed moved little with the Dow up 0.1%&, the S&P 500 up 0.2% an the Nasdaq 0.3%.
The USD Index recovered 0.2 points yesterday on a small rebound in Yields, EURUSD us trading at 1.0700, it turned lower from 1.0750, just ahead of key resistance at 1.0770 key support is seen at 1.0680 . The RBA executed a dovish hike and the AUD sold off. GBPUSD is trading at 1.2325 and USDJPY is 150.40. Gold and Silver retracted to 1970 and 22.83.
Oil remains under pressure on growth fears despite China recording 13% higher imports than last years October.
There were China's imports unexpectedly grew in October while exports contracted at a quicker pace, causing the trade balance to be lower than expected. It came at a positive 56 bio vs 82 bio expected. The International Monetary Fund on Tuesday revised up its gross domestic product growth forecasts for China to 5.4% in 2023 and 4.6% in 2024 acc to Reuters News.
The Swiss unemployment rated just came a little lower than expected at 2% vs 2.1% while German Industrial output disappointed at -1.4% vs -0.1% expected.
Banking giant UBS reports a higher net loss but more net new money. It has 4000 employees less than in June.
Today, there is no top of the line data but lots of secondaries, some earnings and fed speakers. Traders will continue to adjust to the new rate expectation, possibly causing volatility. One of the best gauges of sentiment and market drivers at the moment is the 10 Year US rate, follow it by using the ZNc1, the price is the inverted yields.
Key Events:
Tuesday
Data: China Trade, AU Rate decision, DE Industrial Output, UK House Prices, CH Forex reserves, US International Trade,
Earnings: Enel, Nintendo, NTT, Gilead, Occidental Petroleum, Uber, UBS, APD, Emerson. l
Michael Barr, Christopher Walker, John Williams, Lorie Logan speak
Wednesday
Data:DE HICP,
Earnings: Airbus, Munich Re, Softbank, Walt Disney, ARM, Siemens Healthliner
, John Willian, Lisa Cook, Mihael Barr, and Philip Jefferson speak
Thursday
Data:Japan Trade Balance, China CPI & PPI, US Initial Jpobless claims.
Earnings: National Bank of Australia, Sony, Merck, Honda, AstrasZeneca, Brookfield, Deutshce Telecom,
Jerome Powell Raphael Bostic and Thomas Barkin speak
Friday
Data:UK GDP, Norway CPI,
Earnings: Allianz, Financiere Richement, Tokyo Electron
Lorie Loagan & Bostic speak
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