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Morning Brew February 26 2024
Erik Schafhauser
Senior Relationship Manager
Good Morning,
Having Digested Nvidia earnings, inflation is coming back into focus and will most likely be the key driver of the week.
We expect key US, EU and Japanese inflation data and also 10 fed speakers and today, Christine Lagarde will be speaking
In the US the expectation is for 85 basis points worth of cuts and the first cut happening between he June and July Meetings, in Europe, traders see 88 bps cuts and the first fully priced in cut at the June meeting.
Japan is seen to hike once, likely in October, the Swiss have a50% chance for a cut in Marcha and more than one cut in June. The SNB only sets rates once. Any shift in these expectations will move markets in FX, rates and equities.
Equities are currently trading a little off the highs with the US 500 5077, the US tech 100 Nas 17890, the Japan 225 39225 and the GER 40 17373. Kim pointed out that there could be more room for the US indexes : New all-time high in S&P 500/US500 but likely more to come. Nasdaq 100 /USNAS100 pausing just below all-time high. Indicators pointing to a bullish break
Nvidia eexceeded 2 Trillion in Market Cap on Friday and closed at 788, on Saturday Warren Buffett reported earnings, record cash on hand and praised Japanese trading houses.
The 10 year is trading at 4.232 and Althea took a look at the 2 years on Friday: US Yields is trading at Two-year US Treasury notes offer an appealing entry point.Sticky consumer and producer prices, a resilient job market, and solid PMI readings are not putting pressure on the Federal Reserve to begin cutting rates. At the same time, the FOMC minutes indicate that the tapering of the Quantitative Tightening is imminent, and it will be discussed in March, ahead of the US Treasury issuing pandemic-like levels of coupon notes and bonds in the second quarter of the year.
The USD Index it just below 104 with EURUSD 1.0830, GBPUSD 1.2667 and USDJPY 150.40. Gold and Silver are 2033 and 22.80, Bitcoin 51500.
It is noteworthy that the Gold and a little less silver have been quite resilient against the shift in rate expectations
Trade safely!!
Monday
- Data US New Home Sales
- Earnings: Workday
Tuesday
- Data Japan CPI, US Durable Goods & Consumer Confidence
- Earnings: Bank of Nova Scotia, Bank of Montreal, Sempra, Constellation Energy, Lowe's, Muenchener Rueck, AutoZone, American Electric Power
Wednesday
- Data Australia CPI, EU Consumer Confiddence, US GDP
- Earnings: Oversea-Chinese Banking, Holcim, Royal Bank of Canada, TJX Cos, Salesforce, Snowake, Monster Beverage, Universal Music, Reckitt Benckiser
Thursday
- Data CH FX Reserves, DE Unemployment Rate, US PCE, Initial Jobless claims
- Earnings: Alimentation, Anheuser-Busch, CRH, NetEase, Dell Technologies, Autodesk, London Stock Exchange Group
Friday
- Data International PMI, NO Nonfarm Payroll