Erik Schafhauser Zürich

Morning Brew December 16 2022

Morning Brew 1 minute to read
Erik
Erik Schafhauser

Senior Relationship Manager

Summary:  Bad Data is Bad


 Good Morning,

A combination of hawkish central banks and bad US economic data drove equities lower and boosted the USD. Interestingly the disappointing retail sales and the extremely disappointing NY Fed Manufacturing Index did not spark hopes of faster rate cuts but raised worries on strength of the economy.

All central banks hiked in line with expectations yesterday but the ECB surprised by tightening earlier than previously expected, as inflation remains high.

The Dow  lost 2.25%, the S&P 500 down 2.5%, and the Nasdaq 3.23%. on a high volume day. Volume was 20% above the average. Netflix and Nvidia were significant losers at -8.6% and -4%.  The German Dax fell 400 points to 14000 a significant support level as the August high.

The USD Index had a volatile day, 103.50 was the low, 104.80the high and we are now at 104.40. EURUSD is trading at 1.0646 after severe swings up to above 1.07 on the hawkish ECB, GBPUSD fell from 1.2434 to below 1.22. Gold and Silver remained weak at 1779 and 22.95.

Today we are expecting the UK retail sales at 8:00 and PMI data from across the world with France at 9:15, Germany at 9:30, the EU at 10:00, the UK at 10:30, Italy 11:00 and the US at 15:45. At 11 we will see the release of the EU HICP expected at 10%.

The Public Company Accounting Oversight Board (PCAOB) said it has full access firms in China for the first time ever, averting a trading ban in the US, the US also authorized a record $858 billion in defense spending.

The quarterly expiry could also be relevant today as the shift in levels has been significant. Sharp moves around the cutoff times are not unlikely as levels could be defended of the defense being given up after the event.

Next week, there is little top tier economic news (US GDP on Thursday and Durable Goods Friday the exception) so I except today to be the last high trading volume day unless we see significant surprises. Many traders and investors are still hoping for year end rally to let their performance look better but after yesterday that seems less likely – it would have to start today or Monday.

 

Quarterly Outlook

  • Upending the global order at blinding speed

    Quarterly Outlook

    Upending the global order at blinding speed

    John J. Hardy

    Global Head of Macro Strategy

    We are witnessing a once-in-a-lifetime shredding of the global order. As the new order takes shape, ...
  • Equity outlook: The high cost of global fragmentation for US portfolios

    Quarterly Outlook

    Equity outlook: The high cost of global fragmentation for US portfolios

    Charu Chanana

    Chief Investment Strategist

  • Asset allocation outlook: From Magnificent 7 to Magnificent 2,645—diversification matters, now more than ever

    Quarterly Outlook

    Asset allocation outlook: From Magnificent 7 to Magnificent 2,645—diversification matters, now more than ever

    Jacob Falkencrone

    Global Head of Investment Strategy

  • Commodity Outlook: Commodities rally despite global uncertainty

    Quarterly Outlook

    Commodity Outlook: Commodities rally despite global uncertainty

    Ole Hansen

    Head of Commodity Strategy

  • Macro outlook: Trump 2.0: Can the US have its cake and eat it, too?

    Quarterly Outlook

    Macro outlook: Trump 2.0: Can the US have its cake and eat it, too?

    John J. Hardy

    Global Head of Macro Strategy

  • Equity Outlook: The ride just got rougher

    Quarterly Outlook

    Equity Outlook: The ride just got rougher

    Charu Chanana

    Chief Investment Strategist

  • China Outlook: The choice between retaliation or de-escalation

    Quarterly Outlook

    China Outlook: The choice between retaliation or de-escalation

    Charu Chanana

    Chief Investment Strategist

  • Commodity Outlook: A bumpy road ahead calls for diversification

    Quarterly Outlook

    Commodity Outlook: A bumpy road ahead calls for diversification

    Ole Hansen

    Head of Commodity Strategy

  • FX outlook: Tariffs drive USD strength, until...?

    Quarterly Outlook

    FX outlook: Tariffs drive USD strength, until...?

    John J. Hardy

    Global Head of Macro Strategy

  • Fixed Income Outlook: Bonds Hit Reset. A New Equilibrium Emerges

    Quarterly Outlook

    Fixed Income Outlook: Bonds Hit Reset. A New Equilibrium Emerges

    Althea Spinozzi

    Head of Fixed Income Strategy

Content disclaimer

None of the information provided on this website constitutes an offer, solicitation, or endorsement to buy or sell any financial instrument, nor is it financial, investment, or trading advice. Saxo Bank A/S and its entities within the Saxo Bank Group provide execution-only services, with all trades and investments based on self-directed decisions. Analysis, research, and educational content is for informational purposes only and should not be considered advice nor a recommendation.

Saxo’s content may reflect the personal views of the author, which are subject to change without notice. Mentions of specific financial products are for illustrative purposes only and may serve to clarify financial literacy topics. Content classified as investment research is marketing material and does not meet legal requirements for independent research.

Before making any investment decisions, you should assess your own financial situation, needs, and objectives, and consider seeking independent professional advice. Saxo does not guarantee the accuracy or completeness of any information provided and assumes no liability for any errors, omissions, losses, or damages resulting from the use of this information.

Please refer to our full disclaimer and notification on non-independent investment research for more details.

Saxo Bank A/S (Headquarters)
Philip Heymans Alle 15
2900 Hellerup
Denmark

Contact Saxo

Select region

International
International

All trading and investing comes with risk, including but not limited to the potential to lose your entire invested amount.

Information on our international website (as selected from the globe drop-down) can be accessed worldwide and relates to Saxo Bank A/S as the parent company of the Saxo Bank Group. Any mention of the Saxo Bank Group refers to the overall organisation, including subsidiaries and branches under Saxo Bank A/S. Client agreements are made with the relevant Saxo entity based on your country of residence and are governed by the applicable laws of that entity's jurisdiction.

Apple and the Apple logo are trademarks of Apple Inc., registered in the US and other countries. App Store is a service mark of Apple Inc. Google Play and the Google Play logo are trademarks of Google LLC.