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Morning Brew October 28 2024
Erik Schafhauser
Senior Relationship Manager
Résumé: What a week ahead
Good morning.
We are heading in to a crazy week:
After today, we expect key data with the highlights the US and EU inflation as well as the US Nonfarm Payroll on Friday. Earnings by 5 of the magnificent 7 and others, events in the middle east and maybe most important the US Election will cause massive moves.
This morning equity indications are friendly, with the US 500 at 5835, Germany 40 19538 andt eh US tech 100 NAS at 20480. 10 Year Yields are higher at 4.29, the USD Index rose to 104.44. EURUSD is below 1.08 and GBPUSD 1.2958 and USDJPY 153.47. The moderate response by Israel against Iran let Oil slide over 4% as it avoided key energy sites, gold and Silver give up app 0.3%
Moody`s cut it`s outlook for France: "The fiscal deterioration that we have already seen is beyond our expectations and stands in contrast w/govts in similarly rated countries that are tending to consolidate their public finances in the current environment. The risks to France's credit profile are heightened by a political and institutional environment that is not conducive to coalescing on policy measures that will deliver sustained improvements in the budget balance. As a result, budget management is weaker than we had previously assessed."
Tomorrow we invite you to Join our exclusive webinar: Trading the 2024 US Election
The 2024 US Election is shaping up to be one of the most pivotal events for global markets. With the stakes higher than ever, traders and investors are closely monitoring the various scenarios that could unfold—and how these could ripple through financial markets. Are you prepared to navigate the volatility and seize the trading opportunities that come with such a monumental event?
Charu took a look at the Japanese quagmire that sent the JPY to a 3 month low:
JPY and Japanese Equities: Navigating Political Instability and BoJ Uncertainty
- Political Instability: Japan’s ruling LDP lost its majority, sparking political uncertainty that raises risks for the yen and Japanese assets. The coalition formation process may take weeks and could finally mean more fiscal spending.
- Impact on BoJ Policy: The instability pressures the BoJ's policy path, with Thursday’s meeting in focus. Governor Ueda may hint at delayed policy normalization due to potential fiscal risks.
- Yen Weakness: Rising U.S. yields and Japan’s political uncertainty have pushed USDJPY to three-month highs, increasing downside risks for the yen.
- Support for Japanese Equities: Despite the political noise, yen weakness, more spending and structural corporate reforms in Japan may keep Japanese equities attractive, especially amid potential supply chain shifts and Japan’s role as a stable regional player
Key Events:
Tuesday
- Data Japan Unemployment, Sweden GDP, US Consumer Confidence
Earnings: Alphabet, Visa, AMD, McDonalds, Pfizer, PayPal
Wednesday
- Data AU CPI, DE Unemployment, CPI and GDP. EU GDP, US GDP
- Earnings: Microsoft, Meta, Eli Lily, Caterpilar, Amgen,
Thursday
- Data China PMI, France CPI, EU Inflaltion& Unemployment rate, US PCE Canada GDP, Bank of Japan
- Earnings: Apple, Amazon, Mastercard, Merck, Linde, Uber, ICE, Intel,
Friday
- Data Global PMI, US Nonfarm Payrolls
- Earnings, Exxon, Chevron, CBOE