Morning Brew July 13 2023

Good Morning,

It was a buy the rumor buy the fact day yesterday and what a day it was! The Lower CPI let rates fall and boosted especially the sentiment of dollar bears

Indexes gained, the Dow 0.3%, the US500 0.7% and the Nasdaq 1.2%. the GER40 is back above 16k and the USD nosedived. The USD Index fell to 100.55 EURUSD broke 1.11, GBPUSD testing the 1,30 Gold and Silver rose to 1956 and 24.20 – Silver is up 6.5% the week.

US rates fell massively despite no clear shift int eh fed rate expectations yet. The 2 year fell to 4.70 and the 10 year to 3.86 – the spread is less than 1% now.

Chinese Trade data came much lower than expected, exports fell by 12.4% vs an expectation of -9.5% and imports -6.8% vs -4% expected. Exports fell the most in 3 years.

UK GDP surprised this morning by falling less than feared, a minus of 0.7% had been expected but the economy only contracted by 0.4% - this is seen as hawkish. 

With he PPI the most important data point today, I expect traders will try to make sense of yesterdays move and the key question will be if we see an intermittent reversal of if momentum keeps going. If momentum keeps up, 98 would be the key target in the USD Index.

Going in to the earning season, find some inspiration from our Option Strategist Koen: What are my options - JP Morgan Earnings - Directional Strategies by Koen

This article discusses two directional strategies, Bullish Debit Call Spread and Bearish Debit Put Spread, for trading JP Morgan's forthcoming earnings results in the context of current low volatility

Thursday July 13th

China Trade Data, UK GDP, FR CPI, US Initial Jobless Claims and PPI

Earnings: Pepsi&Delta

Friday July 14th

Sweden CPI, EU Trade Balance, US University of Michigan, Feds Walker speaks

Earnings: JP Morgan, Citi, Statestreet.. Blackrock

Expiries

        Physically Settled Futures

CUSN3 will expire 14 Jul 2023 at 04:00 GMT

LBRN3 will expire 14 Jul 2023 at 15:00 GMT

HEN3 will expire 17 Jul 2023 at 17:00 GMT