Senior Relationship Manager
Summary: Moderna triggers risk off sentiment
Good morning,
Moderna triggers a risk off move as the company stated that it`s vaccination may be less effective against the new Omicron strain compared to delta.
Stocks and oil fall with Dax and Eurostoxx 50 down app 1.5% and US futures 0.3% to 1.2% Dax tested the 15000 support over night, if broken the way to 14800 would be open. Yesterday markets had closed friendly after US president Biden said that Omicron-related lockdowns were off the table for now and he urged Americans not to panic about the variant. That optimism has faded for now.
Tesla could rise by 5% as Elon Musk called for production improvements, Twitter lost some ground on news that CEO Dorsey steps down and Moderna could gain 11%.
US 10 year yields fall to below 1.50 again and the USD trades a little weaker on the assumption that the Fed will be less hawkish with a new corona variation around.
EURUSD trades 1.1320, GBPUSD 1.3320, Gold and Silver at 1792 and 22.85, Bitcon gives up sonme of yesterdays gains to trade at 56600.
The Swiss franc rises to six year high against the Euro as the SNB remains on the sidelines.
In the US, Powell, Clarida, Mester will be speaking today and Congress could vote as early as tomorrow to ensure funding the federal government.
In terms of economic data we are expecting several European GDP numbers (8:45 FR, 9:00 IT) , German unemployment at 09:55 and EU inflation at 11:00, the Canadian GDP at 14:30 CET. The Swiss KOF indicator will be published at 9:00 as well.
Trade safely
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.