Senior Relationship Manager
Summary: That did not age well
Good Morning,
Despite the Feds strong indication that a June hike of 75BPS was off the table, the market feels differently. The probability of a hike by 75 BPS is priced in at 79% after the high increase of labor costs.
This sparked a huge waive of risk aversion. Indexes fall massively, with the Dow -3.12%, S&P -3.56%, and the Nasdaq -4.99%. Big tech lost heavily and the Nasdaq lost the most since June 2020, the 10 day realized Vol in the S%P500 is at the highest since early 2020 near 40%.
The MSCI Asia gave up 2.5%.
GBP Lost heavily to 1.2360 and EURUSD to 1.0526, the USD Index is at the highest level since 2003 at 103.62.
Gold and Silver gave up the FOMC gains and are currently trading at 22.50 and 1875 and Bitcoin confirms it is not traded as a save haven but a risky asset, giving up 10%.
US 10 years yields rose to 3.1% high and now gave up 0.05%.
The SEC names over 80 firms to a list of entities facing possible delisting from American exchanges
Oil rises on fears of a European Embargo against Russia and reports that US intelligence agencies are supporting Ukraine in identifying high value targets may fuel further aggression.
Today, US Labor data including the non-farm payrolls and the average earnings at 14:30 will be the key event, at 15:15, 17:00 and 21.20 Fed-speakers will be speaking at different events and will be in focus for hints on the stance of the Fed.
Remain cautious and expect sharp moves at any time.
Expiries
Physically Settled Futures:
CK2 will expire on 6th May at 09:00 GMT.
FPK2 will expire on 11th May at 15:00 GMT.
Expiring CFDs:
GASOILUKMAY22 will expire on 10th May at 15:00 GMT.
OILUSJUN22 will expire on 18th May at 15:00 GMT.
2024: The wasted year
Markets are driven by election optimism, overshadowing growing debt and liquidity concerns. The 2024 elections loom large, but economic fundamentals and debt issues warrant cautious investment.
As US economic slowdown hints at a shift away from exceptionalism, USD faces downside with looming Fed cuts. AUD and NZD set to outperform as their rate cuts lag. JPY gains on carry unwind bets and BOJ pivot.
Amid AI and obesity drug excitement, equities see varied prospects: neutral on overvalued US stocks, negative on Japan due to JPY risks, positive on Europe. European defence stocks gain appeal.
With the economic slowdown, quality assets will gain favour, especially sovereign bonds up to 5 years. Central banks' potential rate cuts in Q2 suggest extending duration, despite policy and inflation concerns.
Commodities poised for rebound. The "Year of the Metal" boosts gold and silver, copper awaits rate cuts. Grains may recover, natural gas stabilises. Gold targets $2,300-$2,500/oz, copper's breakout could signal growth.
Markets are driven by election optimism, overshadowing growing debt and liquidity concerns. The 2024 elections loom large, but economic fundamentals and debt issues warrant cautious investment.
As US economic slowdown hints at a shift away from exceptionalism, USD faces downside with looming Fed cuts. AUD and NZD set to outperform as their rate cuts lag. JPY gains on carry unwind bets and BOJ pivot.
Amid AI and obesity drug excitement, equities see varied prospects: neutral on overvalued US stocks, negative on Japan due to JPY risks, positive on Europe. European defence stocks gain appeal.
With the economic slowdown, quality assets will gain favour, especially sovereign bonds up to 5 years. Central banks' potential rate cuts in Q2 suggest extending duration, despite policy and inflation concerns.
Commodities poised for rebound. The "Year of the Metal" boosts gold and silver, copper awaits rate cuts. Grains may recover, natural gas stabilises. Gold targets $2,300-$2,500/oz, copper's breakout could signal growth.