Quarterly Outlook
Fixed Income Outlook: Bonds Hit Reset. A New Equilibrium Emerges
Althea Spinozzi
Head of Fixed Income Strategy
Access both platforms from your single Saxo account.
FX Breakout Monitor: USD limping post-FOMC, SEK rally continues
John J. Hardy
Chief Macro Strategist
Summary: The US dollar is showing more profound signs of weakness, though the bigger break-down levels in key pairs like EURUSD, USDJPY and AUDUSD lie a bit lower for the greenback. The USD outlook in general looks pivotal here ahead of year-end and over the question of the December 15 round of US tariffs against China.
Today’s Breakout monitor
The FX Breakout Monitor is a concise PDF overview of all current and recent price breakouts for the short and medium term for major FX pairs and spot silver and gold.
Below is a snapshot of the full list of currency pairs we track for the breakout monitor. The USD reaction to the FOMC meeting late yesterday and prospects for the reaction to the UK election tonight, as well as news – for better or worse – about the fate of the US-China trade negotiations, gives us hope that the extreme low volatility levels may be fading and that we can see better momentum trades develop after a long period of slim pickings for momentum and trend traders.
Sterling strength has backed off again after a surprisingly aggressive run just ahead of today’s UK election and the results coming in this evening – offering a test for sterling traders’ conviction on any outcome – i.e., whether a Tory majority outcome is already in the price or how much downside risk there is for sterling if the Tories barely squeak through or, likely worst of all for sterling longs, if we see a hung parliament result.
Note that EURUSD, AUDUSD and GBPUSD all closed at new highs for the cycle yesterday, but the first two of these still need a bit more to establish the longer-term 49-day breakout status – something we’ll be watching closely over the next few session as these level are close. The trading environment in general early next week should help us establish whether momentum is developing here in USD downside and otherwise as we will have to know by then the fate of the December 15 US tariffs on China and have at least a status check on ongoing trade negotiations. Our assumption is that détente is USD negative, but the proof either way will be in the price.
Today’s Breakout Highlight: AUDUSD
A number of USD pairs have witnessed a further breakdown here, and prominent among those is AUDUSD, where not only is the USD weak, but AUD has received a bit of a boost on strong commodity prices like copper and iron ore and on some spin that . A détente in the US-China trade row would likely be a must for a significant extension higher here – but regardless, watch the coming couple of sessions and the 0.6900+ area for whether this break unfolds as this would also break the dominant chart feature of the descending channel.
Latest Market Insights
Quarterly Outlook
-
-
Quarterly Outlook
Equity Outlook: Will lower rates lift all boats in equities?
Peter Garnry
Chief Investment Strategist
After a period of historically high equity index concentration driven by the 'Magnificent Seven' sto... -
Quarterly Outlook
FX Outlook: USD in limbo amid political and policy jitters
Charu Chanana
Chief Investment Strategist
As we enter the final quarter of 2024, currency markets are set for heightened turbulence due to US ... -
Quarterly Outlook
Macro Outlook: The US rate cut cycle has begun
Peter Garnry
Chief Investment Strategist
The Fed started the US rate cut cycle in Q3 and in this macro outlook we will explore how the rate c... -
Quarterly Outlook
Commodity Outlook: Gold and silver continue to shine bright
Ole Hansen
Head of Commodity Strategy
-
Quarterly Outlook
FX: Risk-on currencies to surge against havens
Charu Chanana
Chief Investment Strategist
Explore the outlook for USD, AUD, NZD, and EM carry trades as risk-on currencies are set to outperfo... -
Quarterly Outlook
Equities: Are we blowing bubbles again
Peter Garnry
Chief Investment Strategist
Explore key trends and opportunities in European equities and electrification theme as market dynami... -
Quarterly Outlook
Macro: Sandcastle economics
Peter Garnry
Chief Investment Strategist
Explore the "two-lane economy," European equities, energy commodities, and the impact of US fiscal p... -
Quarterly Outlook
Bonds: What to do until inflation stabilises
Althea Spinozzi
Head of Fixed Income Strategy
Discover strategies for managing bonds as US and European yields remain rangebound due to uncertain ... -
Quarterly Outlook
Commodities: Energy and grains in focus as metals pause
Ole Hansen
Head of Commodity Strategy
Energy and grains to shine as metals pause. Discover key trends and market drivers for commodities i...
Disclaimer
The Saxo Bank Group entities each provide execution-only service and access to Analysis permitting a person to view and/or use content available on or via the website. This content is not intended to and does not change or expand on the execution-only service. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Rules of Engagement and (v) Notices applying to Saxo News & Research and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Bank Group by which access to Saxo News & Research is gained. Such content is therefore provided as no more than information. In particular no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Bank Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Bank Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on Saxo News & Research or as a result of the use of the Saxo News & Research. Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Bank Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. Saxo News & Research does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of our trading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication under relevant laws.
Please read our disclaimers:
- Notification on Non-Independent Investment Research (https://www.home.saxo/legal/niird/notification)
- Full disclaimer (https://www.home.saxo/en-gb/legal/disclaimer/saxo-disclaimer)