Erik Schafhauser Zürich

Morning Brew September 20 2022

Morning Brew 1 minute to read
Erik
Erik Schafhauser

Senior Relationship Manager

Summary:  Seesawing ahead of the FOMC


Good Morning

Markets are seesawing ahead of the central bank decisions, here are the probabilities as of right now:

Fed:  +0.75% with 81% Probability, 1% with 19% probability

SNB: +0.75% with 53% Probability, 1% with 46% probability

BoE: +0.5% with 69% Probability, 0.75% with 31% probability

Initially risk came under pressure yesterday but could recover through late trading and overnight.

The GER40 fell to 12600 before rising 300 points to 12900, all three US Indexes gain around 0.7% and all eyes are on the FOMC. Outlier was the healthcare sector, that fell a little lower on president Biden`s declaration that the Corona epidemic was over.

Along overall sentiment, the USD gave up ground and the USD Index fell to 109.60. EURUSD is back above parity, GBPUSD rose to 1.1434, USDJPY remains at 143.35. Gold gained to 1672 and Silver 19.45.

China left rates unchanged as expected.

The Japanese CPI remains high at 2.8% and is seen to rise to 3% in October but there is no action expected from the Bank of Japan. The BoJ set`s rates in the night from Wednesday to Thursday but no change is expected with 97.6% probability.

In the US , confidence of Home Builders fell again and remains “Poor” at below 50. Cause are the Mortgage rates, that continue to rise:  . The 30-year fixed mortgage rate was above 6% last week for the first time since 2008.

Bitcoin felt to 18283 yesterday before recovering to 19400,  ETH traded as low as 1281 before rising to 1365

The Market will be dominated by the FOMC and any possible comments from central bankers. The Germans PPI Canadian CPI or US Building permits would have to come as a real surprise to move markets. 0.75% or 1% by the FOMC is the  forefront of traders’ minds, Investors are not likely to enter the market before Thursday when the picture is a little less muddy.

Expiries

        Physically Settled Futures:

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

Platinum - Oct 2022 (PLV2) will expire 22nd Sep 15:00 GMT

Expiring CFDs:

PLATINUMOCT22 will expire 21st Sep 15:00 GMT

Quarterly Outlook

01 /

  • Macro outlook: Trump 2.0: Can the US have its cake and eat it, too?

    Quarterly Outlook

    Macro outlook: Trump 2.0: Can the US have its cake and eat it, too?

    John J. Hardy

    Global Head of Trader Strategy

  • Equity Outlook: The ride just got rougher

    Quarterly Outlook

    Equity Outlook: The ride just got rougher

    Charu Chanana

    Chief Investment Strategist

  • China Outlook: The choice between retaliation or de-escalation

    Quarterly Outlook

    China Outlook: The choice between retaliation or de-escalation

    Charu Chanana

    Chief Investment Strategist

  • Commodity Outlook: A bumpy road ahead calls for diversification

    Quarterly Outlook

    Commodity Outlook: A bumpy road ahead calls for diversification

    Ole Hansen

    Head of Commodity Strategy

  • FX outlook: Tariffs drive USD strength, until...?

    Quarterly Outlook

    FX outlook: Tariffs drive USD strength, until...?

    John J. Hardy

    Global Head of Trader Strategy

  • Fixed Income Outlook: Bonds Hit Reset. A New Equilibrium Emerges

    Quarterly Outlook

    Fixed Income Outlook: Bonds Hit Reset. A New Equilibrium Emerges

    Althea Spinozzi

    Head of Fixed Income Strategy

  • Equity Outlook: Will lower rates lift all boats in equities?

    Quarterly Outlook

    Equity Outlook: Will lower rates lift all boats in equities?

    Peter Garnry

    Chief Investment Strategist

    After a period of historically high equity index concentration driven by the 'Magnificent Seven' sto...
  • Commodity Outlook: Gold and silver continue to shine bright

    Quarterly Outlook

    Commodity Outlook: Gold and silver continue to shine bright

    Ole Hansen

    Head of Commodity Strategy

  • Macro Outlook: The US rate cut cycle has begun

    Quarterly Outlook

    Macro Outlook: The US rate cut cycle has begun

    Peter Garnry

    Chief Investment Strategist

    The Fed started the US rate cut cycle in Q3 and in this macro outlook we will explore how the rate c...
  • FX Outlook: USD in limbo amid political and policy jitters

    Quarterly Outlook

    FX Outlook: USD in limbo amid political and policy jitters

    Charu Chanana

    Chief Investment Strategist

    As we enter the final quarter of 2024, currency markets are set for heightened turbulence due to US ...

Disclaimer

The Saxo Bank Group entities each provide execution-only service and access to Analysis permitting a person to view and/or use content available on or via the website. This content is not intended to and does not change or expand on the execution-only service. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Rules of Engagement and (v) Notices applying to Saxo News & Research and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Bank Group by which access to Saxo News & Research is gained. Such content is therefore provided as no more than information. In particular no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Bank Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Bank Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on Saxo News & Research or as a result of the use of the Saxo News & Research. Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Bank Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. Saxo News & Research does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of our trading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication under relevant laws.

Please read our disclaimers:
Notification on Non-Independent Investment Research (https://www.home.saxo/legal/niird/notification)
Full disclaimer (https://www.home.saxo/legal/disclaimer/saxo-disclaimer)

Saxo Bank A/S (Headquarters)
Philip Heymans Alle 15
2900
Hellerup
Denmark

Contact Saxo

Select region

International
International

All trading and investing comes with risk, including but not limited to the potential to lose your entire invested amount.

Information on our international website (as selected from the globe drop-down) can be accessed worldwide and relates to Saxo Bank A/S as the parent company of the Saxo Bank Group. Any mention of the Saxo Bank Group refers to the overall organisation, including subsidiaries and branches under Saxo Bank A/S. Client agreements are made with the relevant Saxo entity based on your country of residence and are governed by the applicable laws of that entity's jurisdiction.

Apple and the Apple logo are trademarks of Apple Inc., registered in the US and other countries. App Store is a service mark of Apple Inc. Google Play and the Google Play logo are trademarks of Google LLC.