Morning Brew April 29 2022
Senior Relationship Manager
Anything but boring
We had quite a day yesterday where initially the USD strength persisted and the USD index reached ne highs until we saw a strong surprise in US data. The GDP Advance showed a contraction at -1.4% vs the 1.1% increase analysts had predicted, Core PCE came at 5.2% vs 5.4% expected. This was seen as a dovish sign boosting shares and letting the USD take at least a breather. There has been no change in the clear expectation of a 50 bps hike next week, the probability is at 96.2% while 3.87% are for 75.
Further aided by a strong rise of Meta, indexes rose 3.4% for the Nasdaq and 2.5% for the S&P.
The USD Index hit a high of 103.93 yesterday, the highest since 2003 and is looking to have t he strongest Month in 10 years. We are currently trading at 103.25. EUR and GBP can both gain against the USD off the lows but the Euro has lost 7% against the USD since Russia invaded Ukraine and the pound will likely suffer the worst month since Brexit when it lost app 20%.
Precious Metals recover off yesterdays lows as well with Gold back at resistance at 1910 and Silver at 23.44. European Milling Wheat rose to 385 and UK Crude oil to 108.
Beijing closed more businesses and residential compounds on Friday and according to Reuters reports
Results after the bell were mixed, Apple reported stronger than expected results but warned of supply chain issues for the rest of the year and Amazon earned less than hoped on higher cost. Both shares lose in the after market, Amazon app 10% and Apple 2%. Intel warns of shortages in chips and expects Q2 to lag expectations, shares lost 5% after hours.
Elon Musk reports to have sold Tesla Shares worth app 4 bio.
We are expecting a load of Data today, key will be the German GDP at 10, EU at 11, EU HICP at 11, US Income data and Canadas GDP at 14:30 and Chicago PMI at 15:45 followed by the University of Michigan Sentiment at 16:00. It is Month end so expect some month end position adjustments.
Physically Settled Futures:
HOK2, LBK2, RBK2, SBK2 will expire on 29th April at 15:00 GMT.
OILUKJUN22 will expire on 29th April at 15:00 GMT.
Quarterly Outlook Q2 2022
Quarterly Outlook Q2 2022: The End Game has arrived
- Shocks from covid and the war in Ukraine have forced the global financial and political world to change, but what will the end game be?
Productivity and innovation have never been more importantAs the world economy hits physical limits and central banks tighten their belts, could equities be facing a 10-15% downside?
The great EUR recovery and the difficulty of trading itIf the terrible fog of war hopefully lifts soon, the conditions are promising for the euro to reprice significantly higher.
Tight commodity markets – turbocharged by war and sanctionsWith supply already tight, commodities keep powering on. But will it last for yet another quarter?
Between a rock and a hard placeGeopolitical concerns will add upward price pressures and fears of slower growth, while volatility will remain elevated.
The Great ErosionInflation is everywhere and central banks try to combat it. But will they get it under control in time?
Australian investing: Six considerations amid triple Rs: rising rates, record inflation and likely recessionWhile global financial markets are struggling in an uncertain world, the commodity-heavy Australian ASX index is poised to keep a positive momentum.
Cybersecurity – the rush to catch up with realityWith the invasion of Ukraine, governments and private companies are rushing to reinforce their cyber defenses.