Morning Brew June 01 2022
Senior Relationship Manager
Hopes that inflation is peaking were disappointed yesterday as the EU HICP came 0.3% higher than expected, yields rose and equities came under pressure. Jerome Powell and Joe Biden will meet tomorrow to discuss inflation tomorrow. The 2 year German yields hit a ten year high and the US 10 Year seems to be aiming for the 3% again. The USD Index rose back to above 102 and Gold and Silver came under pressure to trade at 1831 and 21.47. Key support for Silver is 21.25.
Equities held up well with US indexes falling app 0.5% only, the GER40 recovered app 100 points off yesterdays lows to trade at 14440.
The EU agreed on an oil embargo against Russia in a fairly light fashion and the US are looking to provide Ukraine with advanced rocket technology. Ukraine is asking for stronger sanctions against Russia.
The Chinese PMI for May was reported at 48.1 meaning we were still in contraction below 50.
German retail Sales came at a very disappointing -5.4% this morning
Through the day we are expecting international PMIs with the EU one at 10:00 and the US at 16:00 key, The EU unemployment rate at 11:00 and the Bank of Canada rate decision also of importance. The Bank of Canada is expected to hike by 50 Basis Points
We are looking ahead at a very interesting month with many central banks expected to hike rates including the Fed, the ECB and even the SNB acc to Reuters calculations. The Fed will discontinue it`s asset purchases and there is lots of uncertainty about the market reaction.
Physically Settled Futures:
LEM2 will expire 3rd of June at 15:00 GMT.
CONFM2, FBONM2, FBTPM2, FBTSM2, FGBLM2, FGBMM2, FGBSM2, FGBXM2, FOATM2 will expire 7th of June at 15:00 GMT.
LIVECATTLEJUN22 will expire 2nd of June at 15:00 GMT.
10YBTPJUN22, 10YOATJUN22, BOBLJUN22, BUNDJUN22, SCHATZJUN22 will expire 6th of June at 15:00 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.