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Summary: USD weak after US CPI
Good Morning
The US CPI came as expected and traders had apparently expected an even higher number. US Inflation is at the highest since 1982! Despite this, Stocks rose moderately and the USD lost ground. The overall expectation is that with inflation running in line with expectations the FED will not be required to speed up tightening more than already priced in.
US indexes closed higher but none of the indexes rose by more than 0.3%. and markets are getting ready for the earnings season. Tomorrow Citigroup, JP Morgan and Wells Fargo will report earnings.
The USD index fell to 95 a new low since November as 10 year yields fell to 1.74, EURUSD rose to 1.1440 and out of the 1.12/1.14 range, GBPUSD rose to 1.37 further assisted by the pressure on Boris Johnson, USDJPY fell below 115 and Gold and Silver are at 1825 and 23.10. 1835 remains the line in the sand that needs to fall for significant potential.
Bitcoin gained to 44000, 10% off the lows.
Ole Hansen points out the strong start Industrial metals had to the new year
The industrial metal sector has, just like crude oil, started 2022 with strong gains led by
nickel and aluminum, and following months of sideways trading, copper is now also
showing signs of breaking higher. The prospects for rising electrical vehicle demand, tight
supplies and signs China is stepping up its policy response to a slowing economy have all
helped reduce some of the macro risks that has weighed on the market in recent months,
especially those stemming from China’s beleaguered property sector.
Copper broke the resistance at 450 and has significant upside potential if it can hold the level.
Boris Jonson is under pressure after he was forced to admit that he attended a party during the lockdown in December 2020 and the calls for his resignation are fairly loud.
Taiwan chip firm TSMC posted on Thursday a 16.4% rise in quarterly profit to a record, making apple look promising as they are a major supplier.
Today US Data at 14:30 is of significance, the usual employment data as well as the PPI are being releases. Over Night we will receive the Japanese Corporate Goods Prices and Chinese Trade data.
2024: The wasted year
Markets are driven by election optimism, overshadowing growing debt and liquidity concerns. The 2024 elections loom large, but economic fundamentals and debt issues warrant cautious investment.
As US economic slowdown hints at a shift away from exceptionalism, USD faces downside with looming Fed cuts. AUD and NZD set to outperform as their rate cuts lag. JPY gains on carry unwind bets and BOJ pivot.
Amid AI and obesity drug excitement, equities see varied prospects: neutral on overvalued US stocks, negative on Japan due to JPY risks, positive on Europe. European defence stocks gain appeal.
With the economic slowdown, quality assets will gain favour, especially sovereign bonds up to 5 years. Central banks' potential rate cuts in Q2 suggest extending duration, despite policy and inflation concerns.
Commodities poised for rebound. The "Year of the Metal" boosts gold and silver, copper awaits rate cuts. Grains may recover, natural gas stabilises. Gold targets $2,300-$2,500/oz, copper's breakout could signal growth.
Markets are driven by election optimism, overshadowing growing debt and liquidity concerns. The 2024 elections loom large, but economic fundamentals and debt issues warrant cautious investment.
As US economic slowdown hints at a shift away from exceptionalism, USD faces downside with looming Fed cuts. AUD and NZD set to outperform as their rate cuts lag. JPY gains on carry unwind bets and BOJ pivot.
Amid AI and obesity drug excitement, equities see varied prospects: neutral on overvalued US stocks, negative on Japan due to JPY risks, positive on Europe. European defence stocks gain appeal.
With the economic slowdown, quality assets will gain favour, especially sovereign bonds up to 5 years. Central banks' potential rate cuts in Q2 suggest extending duration, despite policy and inflation concerns.
Commodities poised for rebound. The "Year of the Metal" boosts gold and silver, copper awaits rate cuts. Grains may recover, natural gas stabilises. Gold targets $2,300-$2,500/oz, copper's breakout could signal growth.