Morning Brew September 8 2022
Senior Relationship Manager
Summary: Short term bear market rally or the beginning or a turnaround?
Lower Oil Prices and falling Rates in the US provide a relief rally and in equities and suspend the rise of the USD . The Dow Jones gained 1.4%, the S&P 500 1.84% and the Nasdaq 2.14% The GER40 is back at above 1300.
EURUSD is back near parity, GBPUSD 1.1500 and USDJPY 144. Gold and Silver rise to 1715 and 18.47.
All eyes will be the ECB which is looking to announce the biggest rate hike in it`s history with a probability of 70% as of right now.
The rate announcement will be at 13:45 CET and at 14:30 the press conference will shed light on the banks rationale. It is stuck between a rock and a hard place with economic worries and debt laden economies on the one hand and inflation on the other.
Jerome Powell is speaking this afternoon and might make comments to move the market, 50 defence ministers are meeting in Germany to discuss aid for Ukraine.
Liz Tuss, the new UK prime minister will speak in parliament today, outlining a plan to fight high energy costs.
The EU energy ministers will hold an emergency meeting tomorrow and seek a cap on the price of Russian Gas.
The overall question is if we are seeing a longer turnaround of a short term bear market rally - sentiment will be the key.
Thursday; CH Unemployment Rate, ECB Rate decision, US Jobs data
Friday: CN PPI, CA Unemployment rate
Physically Settled Futures:
10-year Japanese Govt. Bond - Sep 2022 (JGB1U2) will expire 9th Sep at 1:00 GMT
Low Sulphur Gasoil - Sep 2022 (FPU2) will expire 9th Sep at 15:00 GMT
JP225SEP22 will expire 8th Sep at 2:00 GMT
Latest Market Insights
Quarterly Outlook Q3 2022: The Runaway Train
- Central banks' attempts to kill inflation is a paradigm shift, which could end in a deep recession.
Tangible assets and profitable growth are the winnersWith US equities officially in a bear market, the big question is where and when is the bottom in the current drawdown?
Understanding the lack of investment appetite among oil majorsThe everything rally seen in recent quarters has become more uneven, as its strength is driven by commodities in short supply.
The pressure is on as the wind leaves the sailsWith cryptocurrencies in sharp decline, are we entering a crypto winter or is the bear market a healthy clean-up of the crypto space?
Why the Fed can never catch up and what turns the US dollar lower?Many other central banks are set to eventually outpace the Fed in hiking rates, taking their real interest rates to levels higher than the Fed will achieve.
Bank of Japan: Swimming against the tideThe Japanese economy has gone from the age of deflation to rapidly rising prices in no time, leaving the Bank of Japan in a pickle.
Green transformation detour and bear market hibernationWith the impending risk of global econonomic derailment, we share the five things investors need to consider in this new half year.
Crisis redux for the eurozone?Whether there's going to be a recession in Europe or not, the path towards a stable economy will be agonizing.
Technical Outlook: Gold, Oil and a remarkable multi-decade perspective on EquitiesThe Nasdaq bubble pattern, USDJPY resistance, crude oil uptrend losing steam and the technical outlook for USD.
China: the train of new development paradigm left the station two years agoChina is transiting to a new development paradigm, as they are hit by deteriorating terms of trade, a slower global economy and an uncertain future while continuing attempts to contain the pandemic.