Morning Brew September 13 2022
Senior Relationship Manager
Summary: Risk on remains - Will CPI confirm peak inflation?
Risk celebrated another on-day with the USD Index in decline and stocks grinding higher. The Dow gained 0.7%, yesterday, the S&P 1.06% and the Nasdaq 1.27%. The USD Index fell below 108,15.
Main driver of the optimism seems to he hopes inflation is peaking on the one hand and large amounts of risk capital that want to be put to use.
EURUSD is trading at 1.0140, GBPUSD at 1.17 and USDJPY at 142.28. Gold and Silver are trading at 1722 and 19.70. Bitcoin at 22500 and oil is off the lows at 87.70.
UBS Group AG plans to increase its dividend to $0.55 and buy back shares to the tune of $5 billion for 2022
German Inflation data just came as expected and UK Unemployment slightoy better than expected, for the rest of the day, the ZEW Index for the EU as well as for Germany at 11 will be of interest, at 14:30 the USD CPI will be key. The annual rate is expected at 8.1%, down from 8.5% last month. If the decline is confirmed, it would raise hopes that the rate hikes are showing a positive effect.
Ethereum merge will draw attention
The Ethereum software upgrade, the so-called Merge, is expected to take place this week, according to its core developers. The new system, known as "proof-of-stake", will slash the Ethereum blockchain's energy consumption by 99.9%, developers say. Most blockchains, including bitcoin's, devour large amounts of energy, sparking criticism from some investors and environmentalists. We wrote about this here, and this is a key event to watch this week. The merge could make Ethereum more favorable to pension funds and other institutional investors that are under the scanner for environmental concerns, but there is also come skepticism an how scalable Ethereum could become and if it becomes more susceptible to attacks by hackers.
Physically Settled Futures:
US Dollar Index - Sep 2022 (DXU2) will expire 16th Sep at 9:00 GMT
GBPUSD - Sep 2022 (BPU2), E-mini EURUSD - Sep 2022 (E7U2), EURUSD - Sep 2022 (ECU2), JPYUSD - Sep 2022 (JYU2), E-micro EURUSD - Sep 2022 (M6EU2), NZDUSD - Sep 2022 (NEU2), EURCHF - Sep 2022 (RFU2), EURGBP - Sep 2022 (RPU2), EURJPY - Sep 2022 (RYU2), SEKUSD - Sep 2022 (SEU2), CHFUSD - Sep 2022 (SFU2) will expire 16th Sep 15:00 GMT
GER50MIDSEP22 will expire 14th Sep at 8:00 GMT
AUDUSDADSEP22, EURCHFRFSEP22, EURJPYRYSEP22, EURUSDECSEP22, GBPUSDBPSEP22 will expire 14th Sep at 15:00 GMT
USDINDEXSEP22 will expire 15th Sep at 15:00 GMT
US2000SEP22 will expire 16th Sep 8:00 GMT
OILUSOCT22 will expire 16th Sep 15:00 GMT
Futures can be rolled online via the Futures Spread Trade Ticket. Any open positions will be closed after the mentioned times.
Wednesday, Sep 14
US: PPI (Aug)
Japan: Core machine orders (Jul)
UK: CPI (Aug)
UK: RPI (Aug)
UK: PPI (Aug)
Eurozone: Industrial production (Jul)
India: WPI (Aug)
New Zealand: Current account balance (Q2)
Hong Kong: Industrial production (Q2)
Hong Kong: PPI (Q2)
Thursday, Sep 15
US: Jobless claims (weekly)
US: Retail sales (Aug)
US: Philly Fed manufacturing survey (Sep)
US: Empire State manufacturing survey (Sep)
US: Industrial production (Aug)
US: Business inventories (Jul)
Japan: Trade data (Aug)
Japan: Tertiary industry activity index (Jul)
Australia: Unemployment rate (Aug)
UK: Bank of England decision (Sep)
Eurozone: ECB’s Centeno speaks
Indonesia: Trade data
New Zealand: Real GDP (Q2)
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.