Morning Brew August 23 2022
Erik Schafhauser
Senior Relationship Manager
Summary: Risk Off Sentiment rules
Good Morning,
High inflation, Rising yields and fears of a recession scare risk takers. Indexes fall across the board, by app 2-2.5%, the US 10 Year Yield gains beyond 3% and the German to 1.3%. The USD Index breaches the 109 and seems to be testing the 109.30, the July high.
EURUSD falls below parity to trade at 0.9914 and GBPUSD 1.1735. The 1 month atm volatility rises to 11.50. The Euro is trading at 20 year lows.
Gold and silver are trading near supports at 1735 and 18.85.
Gas in the European Union rose again by 13% overnight to a new record. They doubled in a month and are currently 14 times higher than the average of the past decade. A pipeline operator reported damage to a Khazak pipeline.
Peter points out the tightening of financial conditions: https://www.home.saxo/content/articles/equities/negative-sentiment-is-back-in-equities-as-conditions-tighten-22082022
The trading focus will be on the PMI, the IFO, and the EU Consumer Confidence along the US Home Sales and any comments on how to resolve the looming European crisis. Nervousness prevails and it will be interesting to see if and when risk willingness returns.
Economic Data:
Today: International PMI through the day, EU consumer Confidence, US New Home Sales
Wednesday: US Durable Goods Orders
Thursday: German GDP, IFO, US GDP,
Friday: US GDP, Powell Speaks at Jackson Hole
Earnings.
Today: JD.com, PetroChina
Wednesday: NVIDIA, Salesforce, , Snowflake
Thursday: VMware Inc
Friday: Industrial Bank
Expiries
Physically Settled Futures:
Palladium (PAU2) will expire 23rd Aug at 15:00 GMT
Orange Juice (OJU2) will expire 23rd Aug at 12:15 GMT
Cocoa (CCU2) will expire 24th Aug at 15:00 GMT
Robusta Coffee (RCU2) will expire 24th Aug at 9:00 GMT
CNX Nifty Index (INQ2) will expire 25th Aug at 10:15 GMT
Expiring CFDs:
PALLADIUMSEP22 will expire 22nd Aug at 15:00 GMT
NATGASUSSEP22 will expire 25th Aug at 15:00 GMT
INDIA50AUG22 will expire 25th Aug at 2:00 GMT