Morning Brew December 30 2021
Senior Relationship Manager
Summary: Year winding down with TRY under pressure again
Please find the trading schedule for the New Year here
US Blue Chip Indexes closed at records yesterday, but on small moves and low volume, the year end slowdown is in full swing. The Dow gained 0.25%, the S&P 0.14% an the Nasdaq fell by 0.1%. Most important news for traders was that Elon Musk stated he had exercised his stock options expiring in 2022.
China Evergrande fell app 10% after reportedly missing a further coupon payment.
The USD weakened yesterday, the trade-weighted Index fell from 96.40 to 95.75 only to recover to 96.05, EURUSD is trading at 1.1320 and GBPUSD at 1.3477. TRY is under pressure again, falling to more than 13 Lira to the dollar, a 5% move. The US Goods Trade Deficit rose to a record in November by 17.5% to USD 97.8 billion from USD83.2 billion.
Gold remains near 1800 after the worst performing year in 6 and Silver fell to 22.60.
Bitcoin lost 1% over night to 46700, and is near support on the descending trendline from November, The Author of “The Black Swan” Nassim Taleb published a research paper arguing that Bitcoin was worthless.
US 10 year yields rose to 1.5450 and German Bond Futures traded lower, the 30 year is not at 207.50 after a December high at 219.7.
European Gas and electricity prices stabilized after the strong sell offs.
Todays Agenda is rather thin with the Swiss KOF Indicator at 9:00, US employment data at 14:30 and the Chicago PMI at 15:45.
Transaction Tax in Hong Kong
From Jan 1 a Transaction Levy of at 0.00015% per side is charged, rounded to 1 Cent.
Physically Settled Futures:
HGF2, RRF2, SILF2, XKF2, ZLF2, ZMF2 and ZSF2 will expire 30th December 2021 at 16:00 GMT. RBF2 will expire 31st December 2021 at 16:00 GMT. WMF2 will expire 4th January 2022 at 01:00 GMT.
OILUKFEB22 will expire 30th December 2021 at 16:00 GMT. GASOILUKJAN22 will expire 10th January 2022 at 16:00 GMT.
Have a great start into 2022!
Latest Market Insights
Outrageous Predictions 2023: The War Economy
- The constantly growing global need for energy drives the world's richest to huddle up and launch a R&D project in a size the world hasn't seen since the Manhattan Project gave the US the first atomic bomb.
French President Macron resignsThe political stalemate in France and the rise of Marie Le Pen following the 2022 elections corners President Macron, forcing him to give up on politics and resign from his position. At least for now.
Gold rockets to USD 3,000 as central banks fail on inflation mandateAs markets and central banks realise that the idea that inflation is transitory is wrong, and that prices will remain higher for longer, gold is sent through the roof, hitting a price tag of USD 3,000
EU Army forces EU down path to full unionWith continued challenges in the region and a US military that isn't aggressively enacting its former role as global policeman, the European Union agrees to create its own armed forces, bringing the whole region closer.
A country agrees to ban all meat production by 2030In an effort to become one of the global leaders on the path to net-zero emissions, one country decides to not only put a heavy tax on meat, but to ban domestic production entirely.
UK holds UnBrexit referendumFollowing a recession and domestic pressure, the United Kingdom is thrown into political turmoil that will end with a vote to wind back Brexit.
Widespread price controls are introduced to cap official inflationHistory tells us that with the war economy comes rationing and price controls. And this time is no different, as policymakers introduce strict price controls that lead to a range of unintended consequences.
OPEC+ & Chindia walk out of the IMF, agree to trade with new reserve assetSanctions against Russia have caused widespread turmoil due to US Dollar moves in countries across the globe that don't consider the US an ally. To relieve themselves from this, they leave the IMF and create a new reserve asset.
USDJPY fixed to the USD at 200 as Japan overhauls financial systemFollowing the challenges that faced the Japanese Yen in 2022, the Bank of Japan attempts to keep the currency from sliding. Unsuccessful on the long-term, Japan will launch a reset of its entire financial system.
Tax haven ban kills private equityWith the war economy comes an increased focus on national interests and sovereign nations' ability to assert themselves. In that regard, the OECD countries turn their attention on tax havens and pull the big guns out, banning them altogether.