Senior Relationship Manager
Summary: Nasdaq in correction, Precious metals shine
Good Morning
Nasdaq is now officially in correction territory after indexes give up more ground, the Dow closes - 0.96%, the S&P -0.97% and the Nasdaq -1.15%. Tesla is again below 1000. It is the 66th correction of the Nasdaq ever and officially starts when the index is 10% off the high.
China cut key rates over night, turning Indexes higher by app. 0.5%.
US Yields remain high with the 2 year above 1% at 1.07, the 10 Years at 1.86. The German 10 year breached the 0 yesterday but fell back below, currently -0.005. If we rise, 0.05 and 0.1 are resistances.
Oil hovers near the 2014 highs as supply remains a worry.
The USD Index is trading at 95.53, EURUSD is back in the 1.12/1.14 range after the breakout higher failed on higher US Yields, GBPUSD 1.3625 and Oil currencies such as CAD remain strong.
Precious Metals rallied and pulled miners with it, Platinum rose as much as 6.3% yesterday, back above the 1000 to trade at 1030 now. Gold took the initial crucial step for all fans of the metal and breached the 1835. 1860/70 are the important level ahead of the 1900/10. Silver breached the 24 and is struggling with 24.20. 24.50 and 25 are the next levels. Watch that the trade does not get too crowded.
The Turkish Lira will be interesting to watch today at noon, the rate decision is scheduled today and the market is expecting a hike by 25 basis points with a probability of 100% acc. to Refinitiv. Currently we are at 13.50 against the USD. Remember the Margin Change in the Lira tomorrow.
President Joe Biden failed again to push through his voting right change, further weakening his standing.
Top Earnings today are Netflix, and American Airlines,
Economic events are German PPI at 8:00 Austria CPI at 9:00, EU at 11:00, the Norwegian Rate decision at 10, US Employment data as well as the the Philly Fed at 14:30, Existing Home Sales at 16:00.
Expiries
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.
Expiring CFDs:
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.
AI: The good, the bad, and the bubble
While a deep recession may not be iminent thanks to central bank policy, interest rates will have to stay high for longer, and this will be accompanied by volatility risk from the unwinding of bubbles, especially within AI.
Steen Jakobsen,
Chief Investment Officer
The emergence of advanced AI systems is by far the most surprising event this year, turning everything upside down, while risks and benefits are debated. AI will also become an arms race between the US and China.
Peter Garnry,
Head of Equity Strategy
As China navigates global fragmentation, its cycle of technology application, productivity enhancement, and growth is threatened by US breakthroughs in generative AI, limited computing power, and geopolitical tensions.
Redmond Wong,
Market Strategist
Japan’s expertise in semiconductors and robotic integration could be the foundation of AI dominance. Combining two of this year's themes, Japanese equities and artificial intelligence, brings a wave of opportunities.
Charu Chanana,
Market Strategist
The AI fever has turned the technology into a darling, pushing crypto further into no-man’s-land. There are striking similarities between AI and crypto, and if these are to come full circle, AI won't be spared for bubbles.
Mads Eberhardt,
Cryptocurrency Analyst
Stocks related to artificial intelligence (AI) have appeared on investors' radars. Expectations are high, but it may be necessary to consider how to get exposure to AI in a diversified way.
Hans Oudshoorn,
Trainer Academy
The USD is on its back foot as markets celebrate an eventual Fed rate peak and steady long US yields. The stakes are even higher for the Japanese yen if longer major sovereign yield curves have to price in economic acceleration.
John J. Hardy,
Head of FX Strategy
While commodities, broadly speaking, have faced some tough months, a partial reversal during June could signal that the asset class is getting back on its feet with energy holding up and precious metals with upside potential.
Ole S. Hansen,
Head of Commodity Strategy
As inflation remains high central banks face hard decisions about whether they should keep hiking interest rates or stop. Meanwhile, the rise of AI creates bubble-like conditions that only make the decision harder.
Althea Spinozzi,
Senior Fixed Income Strategist