Morning Brew January 2022
Senior Relationship Manager
Summary: Stocks Gain and USD falls after Powell - CPI looms
Jerome Powel appeased equity traders and talks the USD lower
The Dow Jones Industrial Average gained 183.15 points to 36,252.02, the S&P 500 42.78 points to 4,713.07 and the 210.62 points, to 15,153.45, the Dax is back above 16000 at 16050. UBS stated a target of 5100 at year end but expects fluctuation in value.
The USD fell after Jerome Powell testified. He basically confirmed the hawkish stance but indicated the overall policy could be adjusted if needed and that it can take several meetings to reach decisions aimed at the speed of tapering. In his view, the economy should be able to withstand the the COVID-19 surge with only "short-lived" impacts and was ready for tighter monetary policy. 10 Year Yields fall by 5 Basis points. The USD Index fell to the lowest since November at 95.54, EURUSD rose to 1.1372 and GBPUSD to 1.3640.
Gold rose above the initial resistance at 1810 to 1820 and could test the 1835. That is the level that needs to be broken for real upside potential. Silver follows and is at 22.80.
Bitcoin is basically unchanged at 42600 and the USDTRY is unchanged.
The WHO said more research was required on if existing COVID-19 vaccines provide adequate protection against the Omicron variant, Moderna lost 5% and Biontech 6.
Germany reports the highest number of Corona infections ever at above 80.000.
The Japanese Tankan Survey lost against December with input cost and Omicron being cited as the reason.
A request to dismiss an FTC against Facebook aimed at Instagram and Whatsall failed.
The EU Industrial Production at 11 CET and the US CPI at 14:30 are the key events today, with a clear focus on the CPI. The Expectation is for 7% and 5.4% core on an annual basis.
OILUSFEB22 will expire 18th January 2022 at 16:00 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.