Macro Monday call: What if the BoE doesn't cut rates?
Welcome to Macro Monday, Your Cross Asset Weekly Call on Global Markets
This is a summary of Macro Monday, Saxo Singapore's cross-asset weekly call on global markets.
Here is this morning's recording of this week's Macro Monday Call.
- Tactical near-term picture and price action seems to be more confusing every week. We finally get a reversal of the May US nonfarm figure (which was a big miss), with a very strong beat on Friday for June (up by 287,000, versus just 180,000 expected). And yet not only bonds but equities rallies as well? Despite US economic data continuing to tick up (Citi US surprise index highest since January 2015).
- US equities sentiment seems set on bullish and heedless of news flow/data points.
- Expect Federal Reserve implied rate hike probabilities to edge up, with a cascade of Fed speakers on the horn every day this week. Favoured USD longs versus GBP, CHF, EUR shorts.
- Meanwhile yield compression trade will lead to record new lows, even if the Fed hikes three times this year, it will make no difference; US 10s (1.37%) will be sub 1.2%/1.0% by Q3/Q4.
- Capital preservation will take aggressive precedence over capital appreciation.
- Charts galore including: gold, JPY, CAD, GBP, EUR, DXY, WTI crude, copper, the ASX, S&P.
- Strategic view, what are the high probability pathways across the asset classes from a long-term perspective 12-18 months.
- Week ahead: CH/PH/UN Tuesday, Bank Negara Malaysia, Bank of China, Bank of England (25 basis points expected; and if they don’t cut?), Bank of Korea, BCCH.
Here is this morning’s recording of this Week’s Macro Monday Call
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– Edited by Robert Ryan
Kay Van Petersen's the Macro Take has now been folded into the Macro Monday Call. Here is this morning’s recording of this Week’s Macro Monday Call. Please join us here each Monday when we go live at 0000 GMT - 0830 (Singapore/Hong Kong time), 0930 (Tokyo), 1030 (Sydney).