Morning Brew December 23 2022
Senior Relationship Manager
Summary: Risk Takes a Beating
Good Morning to the last Morning Brew in 2022, Happy Holidays and a great start to a healthy, fund and prosperous 2023!
Risk sentiment took another beating on a strong GDP reading causing rates to rise. The GDP estimate was released at 3.2% vs 2.9% expected caused rates to rise and more and more companies are expecting the rising cost of money to lead to a recession in 2023.
US indexes closed in red by 1% for the Dow, 1.45% for the S&P 500 and 2.2% for the Nasdaq, stock of the day was Tesla, giving up 8.9% after announcing discount offers. Over night we see some recovery.
The USD Index rose from 103.80 to 104.55 before falling to 104.30. EURUSDS is now trading at 1.0606, GBPUSD 1.2035, USDJPY 132.60. Gold and Silver took a beating and fell to 1784 and 23.40 before rising to 1797 and 23.70.
Japan`s Inflation came at a 40 Year hi reading at 3.7% but as this was in line with expectations there was little movement.
Todays GDP and PCE reading are the last top tier economic releases in my view, the Swiss KOF and FX reserves could be interesting on the 30th of December for all CHF traders.
The Covid situation in China and any comments on the inflation outlook are the key risk factors next of course to any unforeseen events.