Morning Brew January 18 2023

Good Morning, 

Markets appear a bit uninspired and undecided at the moment, Indexes seem to be looking for the next clue on where to go. The Dow lost -1.14% yesterday, the S&P -0.20% and the  Nasdaq 0.14% but at second glance, there are strong moves.

Tesla exceeded it`s sales expectation in China and shares rose more than 7%, Goldman Sachs disappointed with earnings at USD 3.3 per share against an expectation of 5.48, shares fall 6.5% while Morgan Stanley on beating estimates and shares rise 6%.

The GER40 has breached the 15200 in stride and has room to the upside.

Bitcoin has risen 27% this year and is trading at 21300.

In FX the Bank of Japan provided a big surprise by keeping it`s accommodative stance and keeping the max yield for the 10 year JGB at 0.5%. The Yen fell massively on the news and USDJPY surged from 128.50 to 130.70 or 2%.

The USD Index rises from below 102 to 102.65, EURUSD falls to below 1.08 to trade 1.0780. Technically there is still lots of room to the upside, Kim sees 1.1170 and even 1.14  as possible . GBPUSD rose to 1.2290 and EURCHF fell below parity.

Todays Focus will be on the UK CPI at 8:00, the EU HICP at 11 and the US retail sales at 14:30 followed by industrial production at 15:15.

The overall question remain the Fed path and as well as the question of the looming recession – will it come? When and how bad?

For now the stance remains that the Feed will hike 25 basis points on Feb 1 and reach the peak in June at 4.9% in May / June , the rate in December is seen at 4.4%.

Economic Data & Earnings

Wednesday

UK CPI

EU HICP Final

US PPI, Retail Sales, Capacity Utilization

Earnings: Charles Schwab,

Thursday

Swiss PPI

US Labor Data

Netflix, Procter & Gamble, Northern Trust

Friday

Japan CPI,

Germany PPI

Earnings: Sandvik, Schlumberger, State Street