Morning Brew March 11 2022
Senior Relationship Manager
Summary: ECB Hawkish, HK Shares under pressure, TRY falls, Indexes nervous
The ECB was surprisingly hawkish, there must have been a good amount of pressure from the Bundesbank to take a tougher stance on inflation. While no action was taken on rates, the reduction of bond purchases has been moved forward. German 10 Year Yields rise to 0.3%.
The US CPI came as expected at 7.9% - a 40 year high. US 10 year yields rise to above 2% and the USD Index to 98.55, EURUSD drops to 1.1020 and GBPUSD to below 1.31 again.- Gold is at 1985 and silver 25.75. Oil fell to 111 in the UK Line.
USDJPY rose to 116.55 a 5 year high.
The Turkish Lira is approaching 15 on worries of the impact of the Ukraine war and rising inflationary pressure.
Equities closed lower overall but the large Indexes all fell less than 1%, the GER40 fell to 13270 but could since regain to 13535.
The United States, together with the Group of Seven nations and the European Union, will move on Friday to revoke Russia's "most favoured nation" status over its invasion of Ukraine, this would allow tariffs to be imposed.
A dispute between the US and China on the auditing of US listed Chinese companies is tensioning causing pressure on Hong Kong stocks, Yum Brands falls 10% as it may be forced to delist in the US if an agreement is not reached.
The economic agenda is thin today with the University of Michigan Consumer Confidence at 16:00 CET the most interesting but we are in a news driven environment and there can be sharp moves at any point in time.
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.