Morning Brew November 9 2022

Good Morning,

The US Mid terms results  are out in the open and traders are looking for a clear picture, what seems certain is that the mid terms did not deliver the red wave that had been hoped for by the republicans.

Markets traded risk on yesterday and are in high limbo at the moment. Gold and Silver broke initial resistances at , the S&P tackled the 3800 to trade 3818, the Dax broke above 13.600 and the Nasdaq 100 11.000. The USD Index fell below 110 as 10 year yields fell to 4.15. EURUSD Broke above parity, USDJPY is at 145.60 and GBPUSD 1.1550.

Mover of the day was crypto where news of a struggling FTX caused a massive selloff, bitcoin fell to near 17.000 before it recovered on news that Binance announced plans to buy FTX in a bailout, currently trading 18300.

We are observing interesting technical levels in Silver and the GER40 where the 200 day moving averages are being tested. The 200 day moving average in XAGUSAD is at 21.44 and the current level 21.45. In GER40  we are trading at 13637 and the moving average is at 13608.

The next major impulse will come from either the election result or the US CPI tomorrow, if the CPI does not come higher than the feared 8%, it could cement expectations of a less hawkish fed. We are at 67% probability of a 50 BPS hike in December and 33 for 75 bps.

The move the last few days hints that traders are setting up for a year end rally – let us see if we get it.

Headlines:

• China's factory gate prices for October dropped for the first time since December 2020
• North Korea fired at least one ballistic missile into the sea
• Commerzbank said on Wednesday that net profit fell by 52% in the third quarter,
• Elon Musk has sold app 4 bio  billion worth of Tesla shares in the last few days

Economic data:

• Wednesday: Japan Trade Balance, China PPI and CPI,
• Thursday: US CPI and Labor Data
• Friday; DE HICP, UK GDP, Uni of Michigan sentiment

Earnings:

• Wednesday: Honda Motor , Manulife Financial, Siemens Healthineers, TC Energy,
• Thursday: Deutsche Telekom, Allianz, Merck, Tokyo Electron, Engie, Becton Dickinson, AstraZeneca, Brookfield Asset Management, National Grid, TransDigm
• Friday: SoftBank Group, Cie Financiere Richemont