French Elections: If the left & center parties keep Marine Le Pen’s bloc from a majority, unstable paralysis will follow. If they don’t, the National Rally will split power with Emmanuel Macron — accompanied by a bond market selloff and halt to growth, Bloomberg >>>> it IS going to get pretty messy-complicated
Guindos said the ECB “don’t have a predetermined path” for interest rates.
Iran would use ‘all means’ to back Hizbollah if Israel launches full-blown war, official says Aide to supreme leader warns Israel risks triggering regional conflict in the event of all-out offensive against militant group-FT
Crude highest levels since April
Shell pauses construction of European biofuels facility >> Shell is likely to take a write-down as a result. Another misallocation of shareholders' money
Small Cap Stocks post worst first half in HISTORY relative to Large Caps >>> #Mag7
BofA: Only 24% of stocks in the S&P 500 outperformed the index YTD, marking the third narrowest 6-mo. period in history since 1986 (was narrower in Jul 2023 at 23% and in Feb 2020 at 21%).
Gold-buying frenzy grips Vietnam and Thailand as economic fears mount
#USDJPY >>> JPY keeps falling, you can't intervene to strengthen JPY and at the same time intervene to keep yields 'ridiculously' low...something has to give, right now its the JPY, which is becoming a huge issue for #USDCNH which is now a #crawlingpeg basically
Equity markets : as we start H2 2024, markets are on highs, Mag7 valuations 'crazy' rich really, elections will start to impact #uncertainty Trump will be all about spending (UST long-end giving way in anticipation), inflation remains sticky, and Europe election risk/political uncertainty on higher levels with Le Pen (worse with far-left), strangely enough the UK will be steady-good-boring with Labour going forward.. #EURGBP lower
Resilient economic growth: The US economy shows robust growth driven by investments in AI, defence, semiconductors, and obesity drug manufacturing, despite aggressive monetary policy rate increases and cooling labour markets in the US and Europe.
Persistent inflation: Inflation in the US and Europe remains higher than initially expected but is easing, and robust wage growth is contributing to an income-driven economic growth scenario, which is seen as a "goldilocks scenario" entering the third quarter.
Two-lane economy: Different sectors of the economy are experiencing varying impacts from high-interest rates, with sectors like real estate and car manufacturing struggling, while defence, semiconductors, AI, and obesity drug manufacturing are booming, complicating monetary policy decisions.
Investment outlook: The short-term investment outlook is positive, favouring risky assets due to calm financial markets and a low financial turbulence indicator. Recommended asset allocations include being overweight in equities and commodities, European equities, and sectors like energy, healthcare, financials, and information technology. We also like short-term government bonds and high quality corporate bonds.
Commodity and FX views: The energy and grains sectors are expected to perform well, with robust demand for crude oil and grains recovering from adverse weather conditions. In the FX market, risk-on currencies like AUD and NZD are expected to outperform in a bearish dollar environment, while low-yielding currencies like JPY and CHF are likely to underperform
Iran would use ‘all means’ to back Hizbollah if Israel launches full-blown war, official says (ft.com)
Joe Biden slams US Supreme Court presidential immunity ruling as Donald Trump seeks to overturn hush money convictions (msn.com)
Gold-buying frenzy grips Vietnam and Thailand as economic fears mount | South China Morning Post (scmp.com)
#EURUSD will go through support particularly if the French far-left gets in.. but overall uncertainty may well keep EURO offered overall again #EURJPY ?
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