Morning Brew November 24 2022
Senior Relationship Manager
Summary: Calm Thanksgiving after dovish Fed Minutes
Happy Halloween to all who find it significant
It is likely to be a calm day with the weeks key data and events out of the way.
The Fed Minutes were more dovish than expected with the key phrase that a slowing in the pace of increase would soon be appropriate”. The 10-year treasury yield fell to 3.69%. The terminal rate for May remans at near 5% though.
The USD Index fell to below 106, EURUSD broke above the 200day moving average to trade at 1.0430, GBPUSD Broke above the 1.20 and USDJPY 138.80. Gold and Silver are at 1755 and 21.55. The US500 rose to 4032 and is but 0.5% away from the 200d MA after gaining 0.6%. Tesla gained nearly 8% on a buy recommendation by Citi.
Today the most interesting items are the German IFO expected at 85 and the rate decision by the Central Bank of Turkey, where a cut by 1.25% is expected with a probability of 86.5%.
China`s Corona numbers remain worrying as the country reported a record high number of COVID-19 infections,
Volkswagen discontinued all ads on Twitter.
Trading schedule: Thanksgiving Day 2022
Latest Market Insights
Q4 Outlook 2022: Winter is coming
- Winter is coming to the financial markets as central banks are tightening their grip. How spring will look is still a question.
European energy crisis: it will get worse before it gets betterThe winter in Europe will be tough, but whether the result is political chaos or sustainable, innovative solutions is still undecided.
A difficult and volatile quarter awaitsAs the year draws to an end, commodities continue to be at centre stage of the world with growth pockets political uncertainty.
The bright side: crises drive innovationThe positive spin on crises is that they come with solutions. It is worrisome that deglobalisation may be a response to this crisis.
Green transformation in China: renewable energy and beyondGoing green, China needs to span numerous energy sources to ensure stability, as every source comes with a challenge.
Asia: Intermittent solutions, but a faster renewable adoption curveAsian energy supply is being squeezed. This and the adoption of renewables may change the investment sentiment in the region.
FX: A Fed thaw needed to deliver a sustained USD turn lowerThe US Dollar can keep momentum when the Federal Reserve continues to tighten, leaving the rest to play to their drum.
Autumn can become ugly for equities and bond holders. Comfort for Dollar longsTechnical analysis suggests that equities could face a tough Q4 as could fixed income. US Dollar positions could provide some upside.
The next stock market sector to watch, with stocks going nuclearAs the world scrambles to find affordable, sustainable energy, nuclear is getting attention from politicians and investors alike.
The crypto space is getting cold when the hype disappearsCryptocurrencies face a winter of their own as retail investors and governments are asking tough questions.