Senior Relationship Manager
Summary: After the CPI is before Retail Sales
Good Morning,
After the number is before the number and after the Fed Speaker is before the Fed Speaker
The CPI yesterday showed disinflation is continuing but it w3as higher than expected. This caused yields to rise. The US 2 Year rose to above 4.6% and the peak fed rate expectation shifted higher to 5.26% in July – the year End Rate is seen at above 5%.
The Dollar gained with the USD Index now at 103.50, EURUSD 1.0710 GBPUSD 1.2100, USDJPY 133.20 and Gold and Silver at 1844 and 21.70.
While the Dow Jones and the S&P 500 fell (-0.46% and -0.03%) the Nasdaq closed higher against the odds. Normally the highly leveraged Nasdaq would suffer the most by rising rates but Tesla and Nvidia can gain significantly and support the index. Tesla gained 7.65% and Nvidia more than 5%.
Key for today is likely to be the US Retail Sales at 14:30 and expected at 1.8%. A high number would confirm the need for the fed to be more hawkish while underscoring the strength of the economy at the same time.
Berkshire Hathaway reduced it`s position in Taiwan Semiconductor Manufacturing and bought 20.8 million Apple shares worth $3.2 billion acc to Reuters.
The UK CPI fell more then expected and was reported at 10.1 this morning,
Trade Safely.
Today:
Data: UK CPI US Retail Sales, Industrial Production,
Earnings: KraftHeinz, Barclays, Cisco, Shopify, AIG, Roku
Thursday
Data: US PPI Feds Mester and Bullard speak
Earnings: Air Liquide, Crocs, Hyatt, Dropbox,
Friday
Data: UK Retail Sales, France CPI US Import Prices
Earnings: John Deere Mercedes, Natwest
Expiries
Physically Settled Futures
KCH3 will expire 16 Feb at 16:00 GMT
PAH3 will expire 20 Feb at 16:00 GMT
CCH3, CTH3 will expire 21 Feb at 16:00 GMT
Expiring CFDs
COFFEENYMAR23 will expire 15 Feb 2023 at 16:00 GMT
OILUSMAR23, PALLADIUMMAR23 will expire 17 Feb at 16:00 GMT
COCOANYMAR23, COTTONMAR23 will expire 29 Feb at 16:00 GMT
2024: The wasted year
Markets are driven by election optimism, overshadowing growing debt and liquidity concerns. The 2024 elections loom large, but economic fundamentals and debt issues warrant cautious investment.
As US economic slowdown hints at a shift away from exceptionalism, USD faces downside with looming Fed cuts. AUD and NZD set to outperform as their rate cuts lag. JPY gains on carry unwind bets and BOJ pivot.
Amid AI and obesity drug excitement, equities see varied prospects: neutral on overvalued US stocks, negative on Japan due to JPY risks, positive on Europe. European defence stocks gain appeal.
With the economic slowdown, quality assets will gain favour, especially sovereign bonds up to 5 years. Central banks' potential rate cuts in Q2 suggest extending duration, despite policy and inflation concerns.
Commodities poised for rebound. The "Year of the Metal" boosts gold and silver, copper awaits rate cuts. Grains may recover, natural gas stabilises. Gold targets $2,300-$2,500/oz, copper's breakout could signal growth.
Markets are driven by election optimism, overshadowing growing debt and liquidity concerns. The 2024 elections loom large, but economic fundamentals and debt issues warrant cautious investment.
As US economic slowdown hints at a shift away from exceptionalism, USD faces downside with looming Fed cuts. AUD and NZD set to outperform as their rate cuts lag. JPY gains on carry unwind bets and BOJ pivot.
Amid AI and obesity drug excitement, equities see varied prospects: neutral on overvalued US stocks, negative on Japan due to JPY risks, positive on Europe. European defence stocks gain appeal.
With the economic slowdown, quality assets will gain favour, especially sovereign bonds up to 5 years. Central banks' potential rate cuts in Q2 suggest extending duration, despite policy and inflation concerns.
Commodities poised for rebound. The "Year of the Metal" boosts gold and silver, copper awaits rate cuts. Grains may recover, natural gas stabilises. Gold targets $2,300-$2,500/oz, copper's breakout could signal growth.