Senior Relationship Manager
Summary: Ukraine still key for markets.
Good Morning,
US Indexes closed a little lower yesterday but record a small gain over night along with the dax and Eurostoxx relative to the Futures close. For the first two months, the S&P500 has lost 8.2%, the Nasdaq 12.1%, the Dax is down 9% YTD an the SMI
Russia is becoming more and more isolated internationally and threatened with retaliatory measures against the sanctions.
The War in Ukraine remains fierce and Russia seems to be preparing a massive attack on Kyiv, ceasefire talks yesterday did not conclude military action. More and more western companies are withdrawing from the Russian market or selling stakes. Pressure on big Tech and social media companies is rising to follow.
The Ruble tumbled yesterday and the Russian Stock market remained closed.
EURUSD rose to 1.1210 and GBPUSD to 1.3420, the USD Index 96.80. Implied volatility rises to 8.5% for a one Month at the money EURUSD option, the highest since early 2020.
Bitcoin jumps 5000 points over night to 43400 on Ruble restrictions.
Gold and Silver remain fairly calm at 1909 and 24.45 despite worries Russia might liquidate reserves, Oil (Crude) rises to 97.25.
EV makers Tesla and Rivan jumped higher by 7.5% and 6.5%
Todays Economic Data will be international PMIs, CH at 9:30, DE at 9:55 and EU at 10:00, US follows at 15:45. UK Mortgage Data at 10:30 and the German CPI at 14:00
A surge in inflation is expected on the war in Ukraine and one of the key thing to watch will be the assessment of central banks on that. Will they focus on the temporary nature of rising prices or the necessity to fight them.
Trade cautiously as news around Ukraine could cause jumps at any point in time.
Bond. Long Bond(s)
With real rates being too positive, we see three scenarios: Opportunity to lock in rates at cycle high, government overreach to keep the economy afloat or a complete reset of the economy.
Steen Jakobsen,
Chief Investment Officer
Is a bond bull market ahead? Inflation still poses a risk for investors, but the moment for increasing duration to your portfolio may be approaching towards the end of the year, when central banks might be forced to cut interest rates.
Althea Spinozzi,
Senior Fixed Income Strategist
The furious rate hike cycle has brought gains in the US dollar, but with stagflation risks in Europe and the UK and weakness in the Chinese economy, USD may have more room to run. But a strong dollar could also have repercussions for US growth, emerging markets and commodity prices.
Charu Chanana,
Market Strategist
With the cost of capital rising painfully, stagflation fears are back, illuminating the fragile state of the green transformation, while giving a tailwind to nuclear power, and threatening the growth of AI-related stocks.
Peter Garnry,
Head of Equity Strategy
With supply tightness not only in energy but all commodities, the momentum in commodity prices may continue, pressuring central banks to lower real rates. That could be a good setup for precious metals, including gold, silver and potentially platinum as well.
Ole S. Hansen,
Head of Commodity Strategy
As the pandemic showed, even the US Treasury can experience seismic shifts. With the government increasing the pace of issuing bonds to support fiscal spending, the complex Treasury market and regulatory constraints could spark a liquidity event.
Redmond Wong,
Market Strategist
The tide has turned for bonds. Given the current yields, bonds have become an attractive investment, with added benefits including lower risk than stocks, increased diversification and a steady stream of income unaffected by economic changes.
Peter Siks,
Investment Coach