Morning Call Script - 14 Sept 2023
Overnight asset drivers + the impending data calendar
As we enter a new trading month, @HarksterHQ is happy to announce the evolution of its content offering. Of course, The Morning Hark will continue to arrive in your inbox around 8am London, and we would like to take this opportunity to thank the +16k loyal subscribers for their support. Going forward, we will also be adding Harkster's Mng Call Script. This will focus on the overnight asset drivers and the impending data calendar. It will be particularly useful for those presenting on morning calls on the sell and buy side. Publication Time: 6:45am.
What's Moved:
I feel like I may need to rename this section, it's the middle of September, back to school trades have been placed and yet there have been no major trends. We can no longer blame limited participation on holiday absentees. Nothing has moved, there has been a lot of ink spilt, a lot of discussion on Fed, China, Oil, ECB, German recession, stagflation but here we are, US10s still 4.20-4.30, EURUSD 1.07-1.08, SPX 4450-4550. The 2023 macro landscape is nothing compared to 2020-22 but fingers crossed this is just the darkest hour before the dawn and an end of year Santa rally is just around the corner.
Data: Aussie employment data was stronger than expected (64.9k vs consensus 23k) however it was all part time hires (62.1k vs 17.3k). Consumer Inflation expectations also dropped in Australia from 4.9% to 4.6%. As a result, nothing overnight moved the needle, even US inflation was disappointing yesterday (unless you were short gamma). It was all relatively inline, something for everyone but core 0.3% MoM was a warning to a market looking for disinflationary trends, sticky inflation isn't going to give in without a fight.
FX: ECB the clear focus today after the Reuters “sources" story moved the probability of a hike to 100% by year end. The article indicated the ECB forecasts may see 2024 inflation > 3% relative to the streets lower forecast around 2.7% as the key driver to bring one more hike to the table even though Germany is slipping towards recession. However even if Lagarde & Co does hike, its crucial she indicates we're at or near restrictive, no more to come ... +25bps hike brings us to the highest level since the Euro was launched in 1999. The market is priced for a hike but wants to hear that the risks of more tightening are small, the ECB will become data dependent and that Lagarde sees no more on the horizon. Today is all about her message, hike but done, or no hike but potentially pre commit for their next meeting (hawkish pause). @HarksterHQ will be watching Italian-German yield spread, any blow out on re-finance fears for Italy after a hawkish meeting can ultimately weigh on the single currency. The market will not want a "hard landing" scenario to appear from an overly aggressive Lagarde.
A Podcast for the commute... Inflation Guy: Ep. 81: CPI Report Summary - The Easy Part is Over
The Day Ahead:
EUR (13:15): ECB
USD (13:30): Retail Sales
USD (13:30): PPI
USD (13:30): Initial Claims
EUR (13:45): ECB Press Conference
USD: ARM IPO... beings trading after $51 share issuance
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Like the Optimism..........Santa Claus Rally...Let's go !!!!!!!!!!!!