Trading Weekly: 14th October 2024
Welcome to the Zodia Markets Trading Weekly Newsletter.
Each week, we will provide a concise overview of key global economic events, market data and significant developments in traditional finance and digital assets set to shape the week ahead.
Check in regularly for timely updates, insights and analysis from our trading team.
Summary:
How the charts look:
On a precipice… so much stimulus and not a lot to show…
Macro:
As the week starts, OPEC cuts global oil demand f/c for the 3rd month, China’s trade data falls short and India’s inflation runs hot at 9-month highs.
In the US, the week gets going tomorrow, where the main highlights are US retail sales, jobless claims, industrial production and business inventories. These data points will give a first glimpse at hurricane Helene, the port strike (a brief 3-days with an estimated 4-week cargo knock-on), UAW furloughs and Boeing strikes – all of which should carry a generally weak tone. The final run up to the 5th of November elections, where the polls make it hard to call and the consumer is anxious.
Eyes will be on the ECB this week, with expectations for a 25bp cut. In the UK, the government is trying to woo business (the October budget will be the litmus) ahead key jobs and CPI data.
Earnings season is in earnest and eyes will be on the big banks and how net income will be navigated in a lower rate environment.
Crypto:
BTC made a sharp correction, hitting $66k, its highest level in 2 weeks. It’s as though the more the market is disappointed in Chinese stimulus the more BTC is supported as a near money alternative. According to Coinshares $407mio flowed into BTC, with most US inflows encouraged by Trump catching up in the polls. Meanwhile MicroStrategy’s Saylor has been using a debt financed strategy to keep acquiring BTC.
In crypto options there’s been buying in naked wingy topside strikes for end of Dec favouring calls strikes 80 and 90k. If Trump pulls ahead then $75k is a realistic target.
Monday, Oct 14:
No US data or notable earnings because of Columbus Day holiday.
Elsewhere China trade numbers were disappointing; Singapore GDPbeat, India inflation at a 9month high at 5.49%; Russian trade beat expectations.
Tuesday, Oct. 15:
Data:
US Empire Manufacturing Survey (f/c 3.6, prior 11.5): Helene and the 3-day port strike (which could have a 4-week cargo knock-on) are likely to weigh.
UK jobless f/c 4.1%, higher claims are on the cards as is slowing wage growth.
Eurozone industrial production
Spain and France CPI
Germany ZEW survey expectations
ECB bank lending survey
Wednesday, Oct. 16:
Data:
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US Import Price Index (headline f/c -0.3%, prior -0.3%): expect drag from the 8% drop in oil prices and a -0.9% decline in the greenback vs a basket of currencies.
UK CPI (f/c headline 1.9% core 3.4%; services 5.3%). NB the BoE is expecting 2% headline and 5.5% services).
Earnings:
ASML reports: order values are f/c to increase through the end of the year
Thursday, Oct. 17:
Policy:
ECB Meeting: the futures are pricing in a 95% probability for a 25bp cut on the back of a sharp deterioration in business surveys and a dip in prices.
Turkey rate decision, expected to be on hold.
European Council summit and NATO defence ministers meet in Brussels until Friday.
Data:
EZ Final Sept CPI September, expected to be in line, with wage-intensive inflation momentum continuing to fade.
US Retail Sales (headline f/c 0.3%, prior 0.1%): election uncertainty and decline in savings rates may be tempered by Walmart, Target and Amazon Prime deals.
US Philadelphia Fed Business Outlook (f/c 3, prior 1.7).
US Initial Jobless Claims (f/c 250k, prior, 258k): hurricane Milton (5.5mio were urged to leave Florida’s west coast) and while Boeing’s 33k strikers are ineligible for claims, the effect on tangential businesses are likely to keep claims elevated.
US Industrial Production (headline f/c -0.1, prior 0.8; man’f f/c-0.2%, f/c 0.9’ cap-util f/c 77.8%, prior 78): look for a temporary positive contribution from oil, gas and mining activity.
US Business Inventories (f/c 0.3%, prior 0.4%): some inventory could be front loaded on concern over supply chain disruption (looming China tariffs).
US Treasury Holdings: the split should show the Fed owns 49%; Japan 12% and China 9% (having cut their holdings by 30% in the past 5 years to $777bio).
Friday, Oct. 18:
Data:
US housing starts:
China GDP: GDP is seen falling short of the government’s 5%, while net exports should hold up, domestic consumption is weak, and the recent slew of stimulus measures will likely kick in for early 2025.
target. Property risk is real.
UK September retail sales expected to be soggy while the consumer is saving and not spending.
Policy:
ECB survey of professional forecasters.
G-7 ministerial meeting on defence begins in Naples, runs through Oct. 20.
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Great strategy is all about execution, execution, execution!
1 个月Very informative
Zodia Markets by Standard Chartered
1 个月In crypto, BTC holding $66k remains constructive. BTC has garnering support from further ETF inflows ($458mio yesterday, bringing the total to $1.63bio since 11 Oct) and both Harris and Trump advocating for crypto. Trump is seen as the bigger advocate and were he to pull ahead in the polls decisively, then I’d expect spot BTC to target $75k.
Zodia Markets by Standard Chartered
1 个月17 Oct 2024 Hotter retail sales and cooler jobless claims; stocks near record highs. Major volatility measures tread water near recent peaks. US yields popped (+4bp in the front; +8bp at the long end) as retail sales came in hot and investors dialled back Fed cut bets. ? US stocks advanced 0.5%, and there was a sigh after a bullish outlook from?Taiwan Semiconductor.?Despite woeful weather, tangential knock-on from Boeing strike and UAW, claims were down, real wage growth and demand for goods and services were up. Rate futures are still pricing in Nov and Dec cuts, though these expectations may well moderate if the data continues to come in strong. Systemic funds are trimming equity exposure, while the VIX at 20, VXN at 22 and MOVE at 121 are cautiously treading water ahead of 05Nov. In Europe the ECB cut 25bp (expected); inflation is seen on target early 2025; this nudged bond yields lower c 4bp and helped prop European stocks c. 0.7%. Eyes to China GDP, expected to undershoot and pile on the pressure for even more stimulus – personally, I think this (bad debt and property) will be the systemic shoe to drop… but that’s very likely a 2025 tail. Gold is trading just under $2700 and WTI is still sitting on $70 as near-term support.
Zodia Markets by Standard Chartered
1 个月16Oct. 2024 – snapshot on the day: Crypto: BTC sets its sites on the big-70 – with central banks in easing mode, risk assets, including BTC, are set to gain.? In the last three trading sessions BTC ETF inflows are at $1.2bio. Open interest on the CME is at a record high, spurred on by individuals and intuitional purchases as both US presidential candidates take a crypto positive stance. Ahead of MiCA, Italy ups cap gains tax on BTC from 26% to 42%. Macro: Stocks tread water today after ASML jitters yesterday; Morgan Stanley beat and so is the day’s darling reporter. Bonds rally bid amid a short squeeze, with the UK outperforming (yields -c. 10bp across the curve) after CPI undershot the BOE’s target coming in at 1.7%yoy. In currencies, as the odds are shifting in Trump’s favour, investors are buying USD calls, especially vs the CNH and MXN as a play to profit from Trump tariffs. WTI is clinging to $70 and gold to $2675.