Senior Relationship Manager
Summary: CPI mostly bullish - Earnings Kick Off
Good Morning and happy Friday the 13th for all who care.
The CPI yesterday came basically in line with expectations, the only deviance being the monthly seasonal number that came at -0.1% vs 0.0% expected. Initial comments were fairly dovish – Fed Speakers indicate hikes of only 25 BPS not 50. So far, there is no direct hint at cuts. The probability of a 25 bps hike rose to 90% and the peak rate is at 4.90% in June and the 10 Year rate fell to below 3.5 to trade at 3.44
The market did not move as much as feared or hoped with the Dow up 0.6%, S&P 500 up 0.3%, Nasdaq up 0.6%, the Dax Future broke resistance and could rise to the rose to 15600 area
The USD Index fell to below support and could well target the 100, EURUSD is trading at 1.0850, GBPUSD 1.2205 and USDJPY 128.50. Gold is testing the 1900 and Silver continues to struggle with the 24 figure – 23.75 at the moment. EURCHF is holding above parity having 1.0080 at the moment.
Crypto had a great day and Bitcoin rose to 18850 and Ethereum to 1410.
Chinese trade data was released over night much loser that previously but slightly better than expected: Exports -9.9 vs -10 expected and Imports at -7.5% vs 9.8% expected.
After the CPI release I expect three initial market movers coming up:
Given the job-cuts announced by Goldman Sachs, Bank earnings may well disappoint even if the six larne US banks are also expected to report a 17% drop in net profit in the fourth quarter. The Bank Index has risen app. 6% so far this year.
Volatility in FX is particularly high relative to the implied volatility making options worth taking a look at in my view.
Data:
A new fragmented world order can render some of today's infrastructure obselete, but it also calls for massive new investments across the globe, which requires a new set of strategic and tactical investment strategies.
Steen Jakobsen,
Chief Investment Officer
As globalisation turns to fragmentation, China seems set on playing a role in the global economy, while simultaneously working towards proofing its own economic situation from external shocks and crises.
Redmond Wong,
Market Strategist
The recent bank runs and ensuing challenges are reminicent of something we've seen before. Will it end like the S&L crises of 1986 and 1995?
Chris Dembik,
Head of Macroeconomic Research
Equity markets need to recalibrate to another - fragmented - global world. What's your view on equities in this market - are they going up or down?
Peter Garnry,
Head of Equity Strategy
With every development comes new opportunites, some of which could be in India. Have you considered the country as a part of your diversification strategy?
Charu Chanana,
Market Strategist
A collar is an option strategy that allows some protection while maintaining some upside potential. What investment would you like to use a collar strategy for?
Hans Oudshoorn,
Trainer Academy
There are arguments to be made for many commodities to have upside. Which are you paying the most attention to this quarter?
Ole S. Hansen,
Head of Commodity Strategy
In a very challenging macro environment, which currencies do you think will come out on top?
John J. Hardy,
Head of FX Strategy