Daily analysis 06/27/2024

27. 6. 2024 - Josef Brynda

Latest news

• Dollar consolidates ahead of key inflation release; yen nears intervention
• Poles seek safety in gold investments during troubled times across their eastern borders
• Weak Yen’s Sway Over Japanese Stock Market Is Unravelling
• The National Council of Applied Economic Research (NCAER) projects India's GDP growth to be close to 7.5% for the fiscal year 2024-2
• Today's macroeconomic calendar includes several significant events. Investors should primarily focus on the final Q1 GDP report for the USA, durable goods orders, and weekly jobless claims
• Initial jobless claims are expected to be around 235,000, reflecting a slight decrease from previous weeks' levels of approximately 243,000
• Analyst expectations indicate a quarter-over-quarter economic growth of 1.6%. This is the third and final report, with previous publications showing growth of 1.6% and 1.3% Q/Q respectively. In the last quarter of 2023, the US economy grew by 3.4%; despite still positive growth, a slight slowdown in dynamics is noticeable.
• Household wealth increased by $431.5 billion (2.7%) to $16,208.3 billion in Australia
• International reasearch group BMI has lowered its real GDP growth forecast for New Zealand for 2024, saying "weak growth in the firts quater indicates that the domestic macroeconomic enviroment may be facing more challenges
• The RBNZ is expected to shift to a more accommodative monetary policy later in 2024, with potential interest rate cuts anticipated to support the economy
• Bank of Canada's cutting cycle a 'big tailwind for Canadians': economist
• S&P 500 gain in first half of 2024 blows historical average ‘out of the water’
• Treasury yields at two-week highs as crucial PCE inflation data looms
• ECB Will Be Agile in Deciding on Interest-Rate Path, Lane Says

News summary

• The dollar is consolidating ahead of key inflation data releases, while the yen approaches intervention, potentially increasing volatility in the forex market. Poles are seeking safety in gold investments amid unsettled conditions on their eastern borders, indicating heightened demand for safe-haven assets. The weakness of the yen is no longer influencing the Japanese stock market, prompting potential shifts in investment strategies.
• NCAER projects India's GDP growth to be close to 7.5% for fiscal year 2024-25, supporting an optimistic outlook for the economy. Today's macroeconomic calendar includes the final Q1 GDP report for the USA, durable goods orders, and weekly jobless claims expected around 235,000, showing a slight decrease from previous weeks.
• Analyst expectations point to a quarterly economic growth of 1.6%, the third and final report following 1.6% and 1.3% Q/Q growth. Despite a positive 3.4% growth in Q4 2023, the US economy shows signs of slight slowdown. Household wealth in Australia increased by $431.5 billion (2.7%) to $16,208.3 billion.
• BMI has lowered its real GDP growth forecast for New Zealand for 2024 due to weak growth in the first quarter, indicating challenges in the domestic macroeconomic environment. RBNZ is expected to shift to a more accommodative monetary policy later in 2024 with potential interest rate cuts to support the economy. Economists suggest that Bank of Canada's cutting cycle is a significant boost for Canadians, likely supporting domestic consumption and investments.
• The S&P 500's gain in the first half of 2024 surpasses historical averages, reflecting investor optimism. Treasury yields are at two-week highs ahead of crucial PCE inflation data. ECB, according to Lane, will be agile in deciding on interest rates, signaling flexibility in response to economic conditions.
• These events could cause global market volatility, strengthen safe-haven assets like gold, and prompt changes in investment strategies. The USD may strengthen or weaken based on inflation data, JPY could weaken further with intervention, CAD may strengthen on expectations of rate cuts, while currencies like NZD and AUD may be influenced by domestic macroeconomic outlooks and changes in monetary policy.

5 Things You Need to Know to Start Your Day: Americas

26. 6. 2024 - Josef Brynda

Market Overview US equities are set to rise following a tech rally in Europe. Rivian gets a boost from Volkswagen's investment, and US options traders bet on rate cuts.

Interest Rate Cuts European stocks climbed after a policymaker suggested two more rate cuts for the euro area this year. Gains were led by Nvidia’s rally, lifting the S&P 500.

Rivian's Surge Rivian Automotive soared 50% postmarket, recovering half its year-to-date losses after securing a $5 billion deal with Volkswagen. VW gains access to Rivian’s EV technology and collaboration on new battery-powered vehicles.

Bold Bets on Rate Cuts US traders are betting on a 300 basis point rate cut by the Federal Reserve within nine months, a hedge against a potential economic downturn.

Archegos Trial Bill Hwang’s family office is on trial, exposing Wall Street's questionable practices. Evidence reveals the chaotic final days of Archegos.

Economic Insights Today’s focus includes MBA mortgage applications and new home sales data. Earnings reports from Micron, Blackberry, Levi Strauss, Jefferies, and General Mills are anticipated.

Key Reads

• Nomura CEO's record $12 million pay
• Julian Assange’s release after 14 years
• Mate Rimac’s autonomous car for 2026
• Sanofi’s $20 billion consumer health sale
• Switzerland's banking capital rules timetable

Joe’s Thoughts Joe analyzes Fed policy risks and inflation concerns, noting the potential for rising unemployment and challenges in managing inflation.

5 Things You Need to Know to Start Your Day: Americas

25. 6. 2024 - Josef Brynda

Daily analysis 06/25/2024

25. 6. 2024 - Josef Brynda

Latest news

• European stocks mostly weaken; sentiment hit by tech-led weakness on Wall Street
• Asia FX sees some relief as dollar cools; yen firms amid intervention talk
• NZ out of recession but ‘don’t pop the champagne just yet’
• New Zealanders have become significantly more pessimistic about the labour market over the past three months
• Perceptions of current job opportunities in New Zealand fell sharply in the second quarter, suggesting that the unemployment rate will rise further in the coming months
• Japan and South Korea agreed to seek ways to bolster their currency swap deal in an effort to address persistent weakness in both the yen and won that has exacerbated inflationary pressure via import costs.
• Australia’s Households Remain Pessimistic on RBA Rate-Rise Fears
• US labor market, housing data point to slowing economy
• CB consumer confidence in the US is forecast to be lower than the previous reading, which could signal and confirm a continued cooling of the economy
• Oil Holds Near Eight-Week High on Escalating Political Tensions
• China's premier slams trade tensions as EV exports are hit by tariffs

News summary

• European stocks mostly weakened, with sentiment hit by tech-led weakness on Wall Street. In Asia, FX markets saw some relief as the dollar cooled, and the yen firmed amid talk of intervention. New Zealand is out of recession, but optimism is premature. New Zealanders have become significantly more pessimistic about the labor market over the past three months, suggesting that the unemployment rate will rise further in the coming months.
• Japan and South Korea agreed to seek ways to bolster their currency swap deal to address persistent weakness in both the yen and won, which has exacerbated inflation through import costs. Australian households remain pessimistic due to fears of another RBA rate rise. US labor market and housing data point to a slowing economy. Consumer confidence in the US is forecast to be lower than the previous reading, which could signal continued cooling of the economy.
• Oil prices hold near an eight-week high amid escalating political tensions. China’s premier criticized trade tensions as EV exports are hit by tariffs. Spain’s economy grew faster than expected.
• The weakness in US tech stocks may shortly negatively impact investor confidence, leading to a further decline in the US dollar
• The Australian dollar might weaken due to household pessimism and rate hike fears, while the New Zealand dollar could face pressure due to expected rising unemployment. The USD/CAD pair could be affected by geopolitical tensions and oil prices, where higher oil prices might support the Canadian dollar against the US dollar.

IMF chief says Europe looks like ‘an ideas supermarket’ for the U.S., calls for further integration

24. 6. 2024 - Josef Brynda

The head of the International Monetary Fund on Thursday called on Europe to achieve the full potential of its prized single market, lamenting what she described as a situation that makes the region look like “an ideas supermarket” for the U.S.

Speaking to CNBC’s Karen Tso, IMF Managing Director Kristalina Georgieva said Europe’s economic performance was strengthening and inflation was clearly on a downward trajectory.

Daily analysis 06/24/2024

24. 6. 2024 - Josef Brynda

Latest news

• Earlier this month, the Consumer Price Index (CPI) showed inflation continuing to cool, a report that bolstered investor bets the Federal Reserve would cut rates later this year
• European shares open flat as falling mining stocks curb gains
• Stocks Fluctuate as Traders Await Inflation Cues
• Dollar steady; yen wobbles near 160 as intervention worries linger
• Yen Is Under Pressure Even as Japan Steps Up Its Verbal Warnings
• BoJ Summary Shows Board Discussed Possibility Of Early Rate Hike
• The NZ dollar fell to a 6-day low of 0.6105 against the U.S. dollar and a 4-day low of 1.7510 against the euro
• The Australian dollar weakened against other major currencies in the Asian session on Monday
• NZ exports reach new high in May, pass $7 billion for first time ever
• Saving less and spending less, Australian households are unique
• US millionaires support Joe Biden’s plan to tax super-wealthy, poll shows
• Rich countries plan to buy more gold despite record price
• Australian uranium company Paladin Energy PDN  has agreed to buy Canada’s Fission Uranium in a deal that has an equity value of roughly 1.14 billion Canadian dollars (US$833 million) and aims to create a globally significant supplier of the nuclear fue

News summary

• At the beginning of June, key economic events influenced global markets and currencies. The Consumer Price Index (CPI) showed cooling inflation, raising investor expectations for a Federal Reserve rate cut later this year, which could boost the U.S. economy.
• European shares opened flat due to falling mining stocks, and investors are awaiting further inflation signals. The dollar remained steady, while the yen wobbled near 160 amid intervention concerns. The Bank of Japan discussed an early rate hike, potentially strengthening the yen.
• The New Zealand dollar hit a six-day low against the U.S. dollar and a four-day low against the euro. The Australian dollar weakened against major currencies, possibly due to economic slowdown concerns and unique household saving and spending patterns.
• New Zealand's exports reached a record high in May, potentially strengthening the NZD long-term. Australian uranium company Paladin Energy agreed to buy Canada's Fission Uranium, aiming to create a significant global nuclear fuel supplier.
• U.S. millionaires support Joe Biden’s plan to tax the super-wealthy, which could reduce income inequality. Rich countries plan to buy more gold despite record prices, indicating economic uncertainty and inflation concerns.
• These events suggest a potential weakening of the U.S. dollar, a possible strengthening of the yen, and temporary weakness in the Australian and New Zealand dollars, with European markets remaining stable but sensitive to further economic indicators.

BOE Rate-Cut Bets in August Fade as Services Inflation Runs High

19. 6. 2024 - Josef Brynda

Money markets are now pricing in a 30% chance of a cut in August, compared to 45% before the data was released. There’s one quarter-point cut fully priced for this year, by November, with a 60% chance of a second reduction — down from 80% on Tuesday.

Although the headline inflation number slowed to the central bank’s target for the first time in almost three years, traders are betting that the closely-watched services sector number will keep policymakers cautious. Expectations for BOE rate cuts have fallen sharply since the start of the year, when the market was betting on as many as six reductions.

The central bank is widely expected to keep rates on hold at 5.25% when it meets on Thursday.

Daily analysis 06/19/2024

19. 6. 2024 - Josef Brynda

Latest news

• Holidays in USA
• Australian stocks traded lower the day after the Reserve Bank kept interest rates on hold at a 12-year high
• UK inflation hits its 2% target, but the Bank of England unlikely to move on rates just yet.
• Nvidia has overtaken Microsoft to become the world's most valuable company, ending the day with a market capitalization of $US3.22 trillion
• European stocks drift lower despite UK inflation falling to targe
• It will take years for the oil and gas market to recover from the 'mother of all shocks,' Harvard economist says
• US pushing Netherlands, Japan to restrict more chipmaking equipment to China, source says
• Bitcoin (BTC) Receives Critical Hit, Shiba Inu (SHIB) in Catastrophe Mode, Can Lose $0.00001 Again, XRP Stronger Than It Should Be
• Low investment blocking UK growth, says think tank
• Global central banks indicated a continued willingness to increase gold holdingsv
• EU to Slam France Over Budget Deficit, Adding to Political Woes
• Traders May Overestimate Impact of BOJ Cutting Bond Purchases
• Japan’s exports rise for sixth straight month, thanks to cars and chip equipment
• The British Pound rose after the UK reported another strong services inflation print

News summary

• In the United States, holidays impact trading activities and markets. In Australia, stocks traded lower after the Reserve Bank kept interest rates on hold at a 12-year high. In the UK, inflation hit its 2% target, but the Bank of England is unlikely to move on rates just yet. The British pound may strengthen due to strong services inflation, while the Australian dollar may remain under pressure.
• Nvidia has overtaken Microsoft to become the world's most valuable company, ending the day with a market capitalization of $3.22 trillion.
• European stocks drifted lower despite UK inflation falling to target. According to a Harvard economist, it will take years for the oil and gas market to recover from the 'mother of all shocks.'The US is pushing the Netherlands and Japan to restrict more chipmaking equipment to China, according to sources.
• Bitcoin (BTC) received a critical hit, while Shiba Inu (SHIB) is in catastrophe mode and could lose $0.00001 again. Conversely, XRP is stronger than it should be.
• Low investment is blocking UK growth, says a think tank.
• EUR/USD continues to hover around 1.07 due to the political mood in Europe