Morning Brew January 26 2022
Senior Relationship Manager
Summary: Heading into the FOMC markets remain nervous
Markets are settling down a little ahead of the fed meeting, US indexes traded weakly yesterday losing overall: Dow -0.2%, S&P 1.2%, Nasdaq 2.3%, over night, futures add app 0.5%. Futures are trading at 4356 for the S&P500 the Dow Jones at 34205 and the Nasdaq 14206, the Dax 15200 and the Eurostoxx 50 at 4100. The Vix closed above 30 after hitting 15moth highs.
GE and Microsoft lost 6 and 5% respectively after disappointing earnings. Overall volumes dropped with 13 bio shares traded vs more than 18 bio on Monday,
All eyes are on the Fed tonight with the rate outlook. The expectation is for no change at this meeting but a plan for March and a fast pace of tapering. The Rate decision is at 20:00 CET and the press conference starts 30 minutes later. Also, Tesla Earnings will be in focus after the stock has lost 30% off the highs.
FX and Rates are fairly calm ahead of the FOMC, the USD Index remains near 96, EURUSD is trading 1.13 and GPBUSD 1.35, Gold remains strong on the break above 1835, currently at 1846, Silver fails to follow and remains at 23.70. Bitcoin can stabilize and rise to 37500.
After the presentation of our Quarterly Outlook, Fuelling the Energy Crisis feel free to join our webinar today at 13:00 CET, please sign up here: Upcoming events and webinars | Saxo Group (home.saxo)
U.S. President Joe Biden said on Tuesday he would consider personal sanctions on President Vladimir Putin if Russia invades Ukraine
A Report on Boris Johnson's Downing Street party could be published today as the matter broadens with Scotland Yard investigating a second event that may have violated corona regulations.
Key Economic Data:
Wednesday: Canada Rate decision, US Rate decision
Thursday: US Durable Goods orders and GDP
Friday: Swiss KOF, EU Business Climate, Personal Income, US PCE, University of Michigan Consumer Confidence.
Wednesday: Christian Dior, Boeing, Anthem, , Tesla, Intel, Abbott Laboratories, AT&T,
Thursday: Diageo, Danaher, Apple, Visa, LVMH, Mastercard, Comcast, McDonald's, SAP SE, Blackstone,
Friday: Charter Communications, Chevron Caterpillar
Latest Market Insights
Outrageous Predictions 2023: The War Economy
- The constantly growing global need for energy drives the world's richest to huddle up and launch a R&D project in a size the world hasn't seen since the Manhattan Project gave the US the first atomic bomb.
French President Macron resignsThe political stalemate in France and the rise of Marie Le Pen following the 2022 elections corners President Macron, forcing him to give up on politics and resign from his position. At least for now.
Gold rockets to USD 3,000 as central banks fail on inflation mandateAs markets and central banks realise that the idea that inflation is transitory is wrong, and that prices will remain higher for longer, gold is sent through the roof, hitting a price tag of USD 3,000
EU Army forces EU down path to full unionWith continued challenges in the region and a US military that isn't aggressively enacting its former role as global policeman, the European Union agrees to create its own armed forces, bringing the whole region closer.
A country agrees to ban all meat production by 2030In an effort to become one of the global leaders on the path to net-zero emissions, one country decides to not only put a heavy tax on meat, but to ban domestic production entirely.
UK holds UnBrexit referendumFollowing a recession and domestic pressure, the United Kingdom is thrown into political turmoil that will end with a vote to wind back Brexit.
Widespread price controls are introduced to cap official inflationHistory tells us that with the war economy comes rationing and price controls. And this time is no different, as policymakers introduce strict price controls that lead to a range of unintended consequences.
OPEC+ & Chindia walk out of the IMF, agree to trade with new reserve assetSanctions against Russia have caused widespread turmoil due to US Dollar moves in countries across the globe that don't consider the US an ally. To relieve themselves from this, they leave the IMF and create a new reserve asset.
USDJPY fixed to the USD at 200 as Japan overhauls financial systemFollowing the challenges that faced the Japanese Yen in 2022, the Bank of Japan attempts to keep the currency from sliding. Unsuccessful on the long-term, Japan will launch a reset of its entire financial system.
Tax haven ban kills private equityWith the war economy comes an increased focus on national interests and sovereign nations' ability to assert themselves. In that regard, the OECD countries turn their attention on tax havens and pull the big guns out, banning them altogether.