Week ahead : China consumer prices dropped the most in 3years, after slightly stronger than expected NFP on Friday (still tight and growing), we head into U.S CPI tomorrow and PPI, OPEC monthly meeting and FOMC on Wednesday, then ECB and BoE meeting on Thursday >>> markets not expecting or pricing hardly any risk of a hike for this week, clearly the message and the 'dots' for 2024 will matter
China CPI down a fastest pace in 3years -0.5% (exp. -0.1%)
US corporate earnings: the S&P500’s fate increasingly rests on whether a handful of the biggest tech companies can parlay AI investments into higher profits. 7 Co's, including Microsoft and Nvidia — have driven about 75% of the index’s gain this year. Valuations are high, with the companies’ shares trading at an average of 32 times earnings
Bonds extended their November rally as central banks shifted to a far more neutral stance, suggesting rate hikes are basically done. That set off a race among traders to price in a rapid pivot to rate cuts. Only a week after Federal Reserve Chairman Jerome Powell said it was “premature” to speculate about 2024 easing, markets were betting on about a 70% chance the US central bank will start reducing borrowing costs in March. A full percentage point of cuts are now priced in by November 2024, major shift last week, was ECB hawks pulling their wings
2024 outlook for now, is that the world will grow by a modest 2.7% next year / BBG and a huge amount of elections, including of course in teh U.S
Xi Jinping warns China’s economic recovery at ‘critical stage’. Communist party Politburo promises ‘proactive’ fiscal and ‘effective’ monetary policy to support growth
FED balancesheet down $1.2trn from peak in Aporil 2022, another $3.6trn covid QE to unwind
“We’ve got to cut down on farming due to ‘Climate Change’…or people are going to starve…” -John Kerry ..
Markets :
Broadly speaking, priced to near perfection ? clearly a more hawkish sounding Powell could derail/stop this upside momentum in equity into year-end
UST 10's yields support around 4.00-4.05% held well, right back to 4.25% >>> U.S. debt issuance will be big in 2024 (even if a known known, it will matter)
USD picking up a little as BoJ unlikely to move in Dec (never really was likely mind) and FOMC meeting ahead (ECB and BOE behind on Thursday), BoJ early next week
No.4 of Saxo's outrageous predictions (not predictions, simply food for thoughts and a chat, it's always good to challenge views out there and discuss
Summary: Generative AI, hailed as a productivity boon, becomes a national security threat after a daring AI deepfake heist against a high-ranking official in a developed country. Governments crack down on AI with new regulations, puncturing the AI hype as VCs flee the industry. Public distrust in AI-generated news soars and governments impose new laws, allowing only a small group of entities to disseminate public news.
OSINTdefender on X: "Initial Reports that Israel has given the Lebanese Government and Military a “48-Hour Ultimatum” to begin Negotiations on an Agreement to return Hezbollah to their Positions which were agreed upon by United Nations Security Council Resolution 1701, or else the IDF will launch a… https://t.co/ApwtjKFxCS" / X (twitter.com)
EURJPY - in middle of our range - so little to suggest here, would prefer to sell a big rally towards 160+ again, but will watch fireworks this week with CB meeting and BoJ next week
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