Senior Relationship Manager
Summary: Will Risk Sentiment hold?
Good Morning,
Equities soared higher on Friday with good earnings being cited as the trigger alongside bargain hunting - this shows there are substantial amounts o money on the sidelines. The Dow closed up 1%, S&P 500 up 1.89% and the Nasdaq up 2.66%. Volume was more than 10% higher than average. The GE40 is near 15100 again.
Even though the 10 Year Rate in the US rises to 3.48, the UD remains under pressure and the UD Index falls to 101.70. 101.20 is the next significant support.
EURUSD is trading at 109,15, GBPUSD 1.2425 and UDCF 0.9173. The Yen is weak at 1.2995 a new Governor of the Bank of Japan will be announced in a month.
Gold is 1922 and Silver 23.85 Gold is trading at the 2011 high and a real break higher would make room for a test of the 2000 again. Silver needs to break the 24.50 for any more room.
Bitcoin has risen to 22750 and is testing the September highs, a break here indicates room to 25k.
The big questions if Risk on sentiment holds. This week with China on the sidelines, focus will be on earnings and tier two economic data. The U Debt ceiling will be a topic until resolution and become more urgent when we approach the deadlines.
China is closed this week for the start of the new year.
Economic Data & Earnings
Monday
EU Consumer Confidence at 16:00
Tuesday
Japan PMI
Germany Consumer Confidence
International PMI
Earnings: Johnson & Johnson Verizon Microsoft Corp Texas Instruments Raytheon Technologies Lockheed Martin
Wednesday
Australia CPI
GB PPI
German IFO
Canada Rate decision
Earnings: ASML Holding Tesla Inc IBM ServiceNow Abbott Laboratories NextEra Energy Inc AT&T Inc Boeing Co Automatic Data Processing Automatic Data Processing Inc
Thursday
US GDP Advance Durable Goods Orders and Labor Data
Earnings: SAP SE Visa Inc LVMH Christian Dior Intel Corp Mastercard Inc Comcast Corp Diageo PLC Blackstone Inc
Friday
EU Money Supply
U PCE, Consumption and Conficence
Earnings: American Express Co Chevron Corp
Holidays Monday: Taiwan, Hong Kong, China, Indonesia, Korea, Malaysia, Singapore
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Expiries
Physically Settled Futures
ECOG3 notice day on 24 Jan 2023
NGG3 will expire on 27 Jan 2023
Expiring CFDs
HK50JAN23 will expire on 30 Jan 2023
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.