Morning Brew November 16 2022
Senior Relationship Manager
Summary: Risk Sentiment blinked but back on track today
After a lower than feared PPI yesterday, risk sentiment took a hit yesterday when a rocket struck Poland. There are strong indications that was not fired by Russia but by accident from Ukraine.
As expected, Donald Trump announced to run in the 2024 election.
In yesterday’s session, the Dow gained 0.17%, the S&P 5000.87% and the Nasdaq 1.45%. Walmart jumped 6.5% after the company lifted its annual sales and profit forecasts.
Tesla reports two new crash fatalities to advanced driver assistance systems in October
The USD Index is now trading 106.50, 10 Year yields are at 3.85.
EURUSD is at 1.0380, GBPUSD at 1.1860 USDJPY 139.80. Gold 1774 and Silver 21.60 and Bitcoin 16878.
The UK CPI came at more than 11% against an expectation of 10.70% confirming the difficult place Britain is in, this is a 41 year high. . This afternoon, we will see the US retail sales and import prices as well as the Canadian CPI.
Earnings from Tencent and Nvidia will be closely watched and the outlook given by the companies will give insight on the tech industry.
Key driver remains the expectation that US Inflation may have peaked, that would support risk in next days, anything confirming or contradicting will have an impact.
As we saw yesterday, the political situation remains fragile and caution is a good advisor.
Latest Market Insights
Outrageous Predictions 2023: The War Economy
- The constantly growing global need for energy drives the world's richest to huddle up and launch a R&D project in a size the world hasn't seen since the Manhattan Project gave the US the first atomic bomb.
French President Macron resignsThe political stalemate in France and the rise of Marie Le Pen following the 2022 elections corners President Macron, forcing him to give up on politics and resign from his position. At least for now.
Gold rockets to USD 3,000 as central banks fail on inflation mandateAs markets and central banks realise that the idea that inflation is transitory is wrong, and that prices will remain higher for longer, gold is sent through the roof, hitting a price tag of USD 3,000
EU Army forces EU down path to full unionWith continued challenges in the region and a US military that isn't aggressively enacting its former role as global policeman, the European Union agrees to create its own armed forces, bringing the whole region closer.
A country agrees to ban all meat production by 2030In an effort to become one of the global leaders on the path to net-zero emissions, one country decides to not only put a heavy tax on meat, but to ban domestic production entirely.
UK holds UnBrexit referendumFollowing a recession and domestic pressure, the United Kingdom is thrown into political turmoil that will end with a vote to wind back Brexit.
Widespread price controls are introduced to cap official inflationHistory tells us that with the war economy comes rationing and price controls. And this time is no different, as policymakers introduce strict price controls that lead to a range of unintended consequences.
OPEC+ & Chindia walk out of the IMF, agree to trade with new reserve assetSanctions against Russia have caused widespread turmoil due to US Dollar moves in countries across the globe that don't consider the US an ally. To relieve themselves from this, they leave the IMF and create a new reserve asset.
USDJPY fixed to the USD at 200 as Japan overhauls financial systemFollowing the challenges that faced the Japanese Yen in 2022, the Bank of Japan attempts to keep the currency from sliding. Unsuccessful on the long-term, Japan will launch a reset of its entire financial system.
Tax haven ban kills private equityWith the war economy comes an increased focus on national interests and sovereign nations' ability to assert themselves. In that regard, the OECD countries turn their attention on tax havens and pull the big guns out, banning them altogether.