Peace at last?

00:00:00: Hi and welcome to Swisscote's Daily Market Talk.

00:00:03: It is Monday, the fifteenth of June and week starts on an excellent mood as hopes for a genuine breakthrough in the Middle East.

00:00:11: lifted market sentiment after reports this weekend that US & Iran had reached agreement with the conflict in the middle east and re-open straight up homes.

00:00:22: so oil prices fall sharply this monday easing inflation concerns and boosting global equities while bond yields move lower on expectations that central banks around the world may face less pressure to tighten their monetary policy ahead of a week full-off central bank decisions, including Federal Reserve, Bank of Japan, Bank Of England, Swiss National Bank and Reserve Bank Australia.

00:00:47: So we will talk about all this and more but before we do as always please keep in mind that opinions are my own.

00:00:54: This

00:01:02: show is brought to you by SwissQuote.

00:01:04: So the Middle East could be progressing toward a concrete peace deal, and this time it could be real as Pakistani PM announced last weekend that the US & Iran had reached an agreement on ending conflict in the middle east.

00:01:22: Now, it was his first announcement of peace deal versus thirty-nine announcements of a peace deal by the US President Donald Trump since The conflict began three months ago according to Bloomberg.

00:01:33: As such there's chance that this time is a charm.

00:01:35: so markets are taking the news seriously!

00:01:51: by nearly three percent today to a fresh record high at the time I'm talking here, while The Korean Cosby Index rallied more than five per cent closely.

00:01:59: A Record High as well.

00:02:01: European and US futures are deeply in the green into the European Open this morning As decline oil prices could be sustainable And eventually lead to easing inflation expectations globally and to his softer monetary policy stance across major central banks.

00:02:19: so yield is down to around four percent this morning, reflecting doubt-thinking.

00:02:25: Of course some remain still skeptical regarding the upcoming peace deal between US and Iran as one.

00:02:31: Donald Trump couldn't help himself but told New York Times on Sunday that if an agreement isn't reached all nuclear deal ,the attacks would continue on Tehran.

00:02:43: And too, Israel has gone totally out of control and nobody knows if Israel will be just stopping its attacks.

00:02:48: But as long as oil prices remain in check the market's perception of geopolitical concerns will continue to ease... ...and that is great news heading into a week full of major central bank meetings & decisions!

00:03:00: Remember?

00:03:00: The European Central Bank raised this interest last week for their very first time in almost three years to fight rising inflationary pressures that the latter would help easing these price pressures when oil prices are high, but today and if oil prices is sustainably they could eventually achieve their goal of easing inflation without posing additional trouble to European economies.

00:03:26: And that's good news!

00:03:28: On the flip side of the world The Reserve Bank Of Australia has been raising its interest rates to slow down the price pressure there.

00:03:35: Australian policymakers are expected to sit on their hands at this week's monetary policy meeting.

00:03:41: I'll see how the Australian economic data evolves.

00:03:45: The Bank of England and the Swiss National Bank in Europe are also expected to maintain their own monetary policy rates unchanged this week.

00:03:52: But due to a complete different set-off reasons, the Bank is actually trying to gain some time as inflation in the UK came in softer than expected by analysts in its latest print.

00:04:04: remember but we know that it will spike when the energy price cap will be readjusted.

00:04:09: With little bit luck though global energy prices could ease.

00:04:14: to temper the price pressures in the UK and somehow reduce the need for future interest rate hikes when they come is suffocating under heavy weight of the country's pitiless fiscal.

00:04:26: policy.

00:04:26: That is primarily due to the political decisions of the past.

00:04:30: that actually leaves a country and politicians where productivity and growth remain anemic while no other choice than limit government spending in a setup, remember?

00:04:41: Where investors around the world are asking an increasingly higher return to hold the increasingly risky British debt!

00:04:49: Not that EUK's GDP contracted on April as expected….

00:04:53: The data came last Friday.

00:04:55: We have a quite different weather in Switzerland, however.

00:04:58: The Sambi saw the Swiss inflation rise but rose to point six percent only which is well below its two-percent policy target and feels no urge whatsoever to raise interest rates.

00:05:09: On the contrary watching other major central banks' race may help soften the Swiss francs in coming weeks.

00:05:19: Then we have two other monetary policy meetings that deserve greater attention.

00:05:23: One, the Bank of Japan is due to announce its policy rate tomorrow and the bank would better hike it's interest rates tomorrow when the dollar yen is insistently trading above the one hundred sixty uncomfortable level even Even with a broadly softer US dollar this morning across the board, thanks to your falling oil prices.

00:05:45: Then there's the Fed!

00:05:46: The Fed will announce its latest decision on Wednesday and the world's most important central bank is why they expected to maintain monetary policy unchanged at this week meeting.

00:05:56: but it'll be under very close watch.

00:05:59: It will mark the first meeting of Kevin Walsh as FIMC's chair.

00:06:05: Now, Karen Warsh is taking over a divided Fed.

00:06:08: Remember in April the fed had decided to hold its interest rates steady but that decision was based on very unusual vote split.

00:06:20: Therefore, Kevin Warsh's first accompanying statement will give the tone regarding Federal Reserve overall monetary policy outlook.

00:06:31: And along with falling oil prices, of course we could see this week the green back soften against most majors.

00:06:55: In The Dollar starts the week on a weaker note!

00:07:11: Cable, on the other hand already surpasses its own two hundred-day moving average to the upside and is preparing to test its fifty and a hundred day moving averages which range between one thirty four seventy and one thirty for seventy five levels.

00:07:25: The outlook is more neutral in GBP US dollar however between one three three two one thirty six.

00:07:30: on potentially soft bank of England announcement this week on improved Middle East Outlook.

00:07:36: Elsewhere imprecious metals gold and silver rebound This morning boosted by lower yields across the globe that decrease opportunity cost of holding non-interest bearing metals.

00:07:46: Now note, both metals came off significantly lower from their January highs but they remain above long term bullish trend base as well meaning that prices are still vulnerable to global risk sentiment especially for gold which means precious metal is not yet fully ready to claim a safe haven status.

00:08:05: back and in equities SpaceX IP on Friday went very well indeed.

00:08:10: The stock exploded thirty percent higher at the open and closed days, some twenty percent higher with a valuation of more than two trillion US dollars.

00:08:19: A bit stretched indeed for companies that is bleeding money today without an existing technology to turn space dreams into reality – at least in their reasonable timeline.

00:08:30: In comparison, Amazon for example which is worth around two and a half trillion US dollars today made more than seven hundred billion US dollars in revenue last year.

00:08:39: So yes the valuation doesn't make sense but hey SpaceX may get the funding it needs to try at least bring this dream to reality on its investors' shoulders.

00:08:50: so to the question should anyone invest?

00:08:53: I answer, while SpaceX is not an investment in traditional terms you don't invest to get a re-towing back.

00:08:59: It's more like bet on something that could be actually very promising and explosive but with the chance of being a flop too.

00:09:08: So this is all for today.

00:09:09: I'm Ipek Oskar Deshkaya and thank you for joining me, And Thank You For All Your Beautiful And Supportive Comments!

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00:09:48: I will meet again tomorrow and until then good day

00:09:53: trading!

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