Morning Brew July 27 2021
Senior Relationship Manager
Summary: Markets remain cautious on Ukraine
Worries on Ukraine continue to worry markets, US Indexes closed a little changed yesterday but gave up ground overnight, the US 30 is trading 34500, the US 500 4400 and the US tech100 14280. The GER40 is trading at 15044, key support lies at 14,836. If closing below there is no strong support before 13,390, minor levels would come in at 14,245 and 13,893 acc to our Kim Cramer. The S&P 500 Index closed back below the 200 daily SMA and minor support at 4,446 after being rejected at the resistance level at 4,590, there is not strong support before 3,725.
Gold and Silver were again strong, Gold is just breaking above the resistance at 1876, if we hold above, 1910 is the next significant level. Oil gave up a little ground on profit taking. Bitcoin could recover to 43600 amid discussions if it serves as a safe haven or not.
Althea composed a great collection of the most relevant charts in the bond Markets: https://www.home.saxo/content/articles/bonds/fixed-income-chart-pack-for-february-09022022
EURUSD remains little changed at 1.1315, GBPUSD at 1.3529 and the USD Index at 96.20.
The US reiterated it`s warnings that a Russian attack on Ukraine may be imminent, and that is was moving it`s embassy away from Kiev. German Chancellor Scholz is visiting Moscow today, trying to prevent an escalation ahead of the rumored key day tomorrow. The rumors of an emergency rate hike by the Fed at their closed meeting were proven wrong yesterday.
Justin Trudeau invokes emergency powers to end the Corona protests by truckers..
Key Data comint up:
Today: 8:00 UK Unemployment , 11:00 EU GDP
16th : China CPI and PPI, UK CPI, US Retail sales, US Industrial Production
17th Turkey Rate decision, US Jobl3ess Data and Phily Fed
18th UK Retail Sales, Eurozone Consumer Confidence
Earnings are Marriot, Airbnb and Viacom among smaller companies, tomorrow is more important with Shopify, Wix.com, Hilton, Kraft, AMC, Nvidia and Cisco.
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.