Senior Relationship Manager
Summary: Winter Solstice - Try changes course
Good morning,
Markets are on the rise again, equity futures are up app 1%, 10 year yields rise to 1.42 , EURUSD and GBPUSD rise to 1.1280 and 1.3215, Bitcoin rises to above 48000 gold and Silver make up most of yesterdays losses to trade at 1789 and 22.36.
Most interesting yesterday was an announcement by Turkish president Erdogan to make up for losses in lira deposits if the lira declines exceed interest rates promised by banks. The Lira rises by 40% on the measure. Yesterdays high was 18.24 todays low is 10.68. It will be interesting to understand the financing.
Overall markets are not sure of their direction between Lockdown worries and optimism.
Megatech remained under pressure, Tesla closed below 900 for the first time in since October, Apple lost 0.7%, Meta 2.5% and Microsoft 1.2%.
The Dax Future seems again drawn to the 200d MA that lies at 15503.
GBPUSD is trading above support at 1.3170 and the leaders of both countries are under severe political pressure that could be an interesting setup.
European natural gas prices jumped more than 8% yesterday, nearing an all-time high, with Russian deliveries to Germany through the Yamal-Europe pipeline at very low levels. This will have an impact on inflation and also drive secondary prices ie for fertilizer. Also Electricity prices continue to rise. Track and trade the European Energy Exchange Futures by looking for EEX in Saxo Trader.
The economic agenda is winding down for the year end, today we are expecting the GFK from Germany at 8:00 , the US current account and Canadian retail sales at 14:30 and the EU consumer confidence at 16:00.
Trade safely
Bond. Long Bond(s)
With real rates being too positive, we see three scenarios: Opportunity to lock in rates at cycle high, government overreach to keep the economy afloat or a complete reset of the economy.
Steen Jakobsen,
Chief Investment Officer
Is a bond bull market ahead? Inflation still poses a risk for investors, but the moment for increasing duration to your portfolio may be approaching towards the end of the year, when central banks might be forced to cut interest rates.
Althea Spinozzi,
Senior Fixed Income Strategist
The furious rate hike cycle has brought gains in the US dollar, but with stagflation risks in Europe and the UK and weakness in the Chinese economy, USD may have more room to run. But a strong dollar could also have repercussions for US growth, emerging markets and commodity prices.
Charu Chanana,
Market Strategist
With the cost of capital rising painfully, stagflation fears are back, illuminating the fragile state of the green transformation, while giving a tailwind to nuclear power, and threatening the growth of AI-related stocks.
Peter Garnry,
Head of Equity Strategy
With supply tightness not only in energy but all commodities, the momentum in commodity prices may continue, pressuring central banks to lower real rates. That could be a good setup for precious metals, including gold, silver and potentially platinum as well.
Ole S. Hansen,
Head of Commodity Strategy
As the pandemic showed, even the US Treasury can experience seismic shifts. With the government increasing the pace of issuing bonds to support fiscal spending, the complex Treasury market and regulatory constraints could spark a liquidity event.
Redmond Wong,
Market Strategist
The tide has turned for bonds. Given the current yields, bonds have become an attractive investment, with added benefits including lower risk than stocks, increased diversification and a steady stream of income unaffected by economic changes.
Peter Siks,
Investment Coach