Erik Schafhauser Zürich Erik Schafhauser Zürich Erik Schafhauser Zürich

Morning Brew September 19 2022

Morning Brew 1 minute to read
Erik
Erik Schafhauser

Senior Relationship Manager

Summary:  Welcome to Central Bank Week


Good Morning

Welcome to Central Bank Week

On Wednesday, the FOMC will release it`s rate decision and outline it`s considerations in the press conference. On Thursday the Fed will be followed by the Swiss national Bank and the Bank of England. What is expected?

Fed:  +0.75% with 79% Probability, 1% with 21% probability

SNB: +0.75% with 60% Probability, 1% with 40% probability

BoE: +0.5% with 57% Probability, 0.75% with 43% probability

Ahead of the FOMC there are few significant economic releases, the Japanese and the Canadian CPI would need to surprise to have a real impact, as all eyes are on the Fed.

Today the UK will say goodbye to Queen Elisabeth II and markets will be closed.

Stocks lost heavily last week, the S&P lost 4.77%, the Dow Jones 4.14%, and he Nasdaq 5.48%. the GER40 looks like it will test the 12400 support. We are currently at 12720.

The USD Index is trading at 110, GBPUSD just below 1.14, EURUSD below parity and the Yen at 143.35. Gold and Silver have found some support, Gold at 1660 to trade at 1665, Silver could gain from below 19 to 19.40.

Worries that the central banks will hike too aggressively into a recession seem to drive equities lower while FX traders are uncertain in the short term. Goldman Sachs answers the question on how high rates will go with: "Our answer is high enough to generate a tightening in financial conditions that imposes a drag on activity sufficient to maintain a solidly below-potential growth trajectory." They see the  Fed to hike 75 basis points this week and 50  November and December.

U.S. President Joe Biden said U.S forces would defend Taiwan in the event of a Chinese invasion

 FedEX tumbled 21.4% on Friday. 

VW is seeing a valuation of Porsche at €76 bio, let us see if an IPO of a luxury car maker is a great idea in a recession

Expiries

        Physically Settled Futures:

CADUSD - Sep 2022 (CDU2), E-micro CAD/USD - Sep 2022 (MCDU2) will expire 19th Sep 15:00 GMT

Light Sweet Crude Oil (WTI) - Oct 2022 (CLV2) will expire 20th Sep 15:00 GMT

Expiring CFDs:

PLATINUMOCT22 will expire 21st Sep 15:00 GMT

 

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