Morning Brew JApril 6 2022
Senior Relationship Manager
Summary: Sanctions and Inflation
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A hawkish fed spooks equites yesterday back into the range, the Dow gives up 0.8% the S&P 1.25% and the Nasdaq 2.25%.
Lael Brainard gave a preview of the Fed minutes later tonight when she stated, he expects a combination of interest rate increases and a rapid balance reduction to bring monetary policy to a "more neutral position" later this year, with further tightening to follow as needed.
US 10 Year Yields rose to a new high at 2.6 the USD Index jumped higher to 99.60 and EURUSD fell below 1.09 to 1.0875, GBPUSD 1.3055 and Precious Metals dropped to 1918 for gold and Silver 24.25. Bitcoin drops to 45300 again. Energy is torn between further sanctions against Russia and lower industrial activity, UK Crude is at 107.25.
The EU is looking to implement further sanctions on Russia and it will be key to see how tough a consensus can be reached. Minimum seems to be a ban on coal purchase, possibly oil and energy overall would be a surprise.
Activity in China's services contracted most in two years in March and fell to 42 from 50. German Industrial orders fell much more than expected to -2.2% vs -0.2% expected.
Elon Musk will join the board of Twitter after his purchase of almost 10% of the company.
Spirit Airlines gained 22.5% on a takeover bid.
Today we are expecting the UK PMI at 10:30, EU Producer Prices and the Ivey PMI at 16:00 , tonight at 20:00 the Fed Minutes will be released.