Morning Brew January 19 2022
Senior Relationship Manager
Summary: Nervousness rises and stocks sell off
Nervousness is picking up with the focus on next weeks US rate decision, rising energy costs and tension around Ukraine while Omicron continues to rage.
U.S. Treasury yields jumped to two-year highs and two-year yields breached 1% and the 10 year is near 1.9%
US shares were under pressure yesterday with the Dow losing 1.51%, the S&P 1.84%, and the Nasdaq 2.6%. Over night the pressure remains and most Indexes fall further 0.5%.
Nasdaq ends down 9.7% from Nov 19 record, close to a 10% correction for the first time since early 2021, Reuters reports that a survey by BofA showed fund managers had cut their overweight positions to their lowest levels since December 2008 and a second by Deutsche Bank showed that an overwhelming majority believed U.S. technology shares are in a bubble territory. Shares in Goldman Sachs Group fell as 8% yesterday after missing expectations, Big tech lost between 1.8% and 4%
EURUSD fell from 1.1450 to 1.1330 and GBPUSD to 1.3600. The UK releases Inflation data at 8:00 this morning, expected at the almost a decade of 5.2% and Prime Minister Boris Johnson is on the brink of facing a leadership challenge, according to reports. 1.3550 is the next decent support ahead of the big figure at 1.35.
Silver jumped by 2% yesterday, Gold did not follow and we are currently trading at 1813 and 23.50. The Russian Ruble was under pressure and stocks fell on tensions over the Ukraine. German Foreign Minister Baerbock visited Moscow yesterday and the US Secretary of State is expected un Ukraine today.
Bitcoin remains near 42000
Oil prices hit their highest since 2014 an a pipeline outage near Turkey and worries about political tensions.
Germany reports more than 100k for the first time ever, France and Italy also report numbers at record levels.
Microsoft Corp is buying "Call of Duty" maker Activision Blizzard for $68.7 billion in the biggest gaming industry deal in history
The Biden administration is reviewing Alibaba's cloud business to determine whether it poses a risk to U.S. national security, stocks lost 2.2%.
The Swiss National Bank does currently not plan to issue a digital currency.
Key Events today are the UK and German CPI at 8:00, and the Canadian one at 14:30 and earnings by Bank of America, Morgan Stanley, Procter and Gamble, Alcoa, United and US Bancorp.
Physically Settled Futures:
CLG2 will expire 20th January 2022 at 16:00 GMT.
ECOG2 will expire 23th January 2022 at 10:00 GMT.
NGG2G2 will expire 27th January 2022 at 10:00 GMT.
GCG2, MGCG2 will expire 28th January 2022 at 16:00 GMT.
NATGASUSFEB22 will expire 25th January 2022 at 16:00 GMT.
INDIA50JAN22 & TAIWAN95JAN22 will expire 27th January 2022 at 02:00 GMT.
GASOLINEUSFEB22, GOLDFEB22 & HEATINGOILFEB22 will expire 27th January 2022 at 16:00 GMT.
CHINA50JAN22, HK50JAN22 & SINGAPOREJAN22 will expire 28th January 2022 at 02:00 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.