Morning Brew January 15 2024

Good Morning

Please remember that today is Martin Luther King Day, a US Market holiday.

Yields fall while the Dollar remains strong to geopolitical risks and Equities trade optimistically. The US 500 is near the 4800 at 4786, , the US Nas 100 Tech at 16767 and the GER at 16770.

10 Year US yields have retreated to 3.93 while the USD Index 102.43 with EURUSD at 1.0962, GBPUSD 1.2750 and USDJPY 145.53. Gold and Silver recovered significantly on Friday but gave up parts of the gains again, we are now at 2054 and 23.25

Rate traders are now pricing in 166 BPS of rate cuts until December.

Nvidia remains strong and is up 11% this year, Tesla is the loser among the magnificent 7 at -8% this year, Boeing has lost almost 13% this year.

Bitcoin could not hold on to gains after the launch of the Bitcoin ETF, is trading 10% lower than a week ago.

Lots of  focus is on China today:
- against expectations, China did not lower rates over the weekend but added liquidity to support the economy.
- Reuters Reports evidence that Chinese Firms are purchasing Nvidia Chips against the US Ban
- In Taiwan, the pro-independence leaning candidate wont he election
- China is calling call for a peace conference for Gaza

We are looking at a week with a moderate amount of data and earnings, Wednesday is the most interesting economic releases while Tuesday has the most earnings.

Besides scheduled events, the Middle east as well as any news regarding China/Taiwan will be closely watched. In Switzerland, the World Economic Forum is starting today and politicians and economic elites and those who want to be important are meeting in Davos with comments and statements to be expected at all times.

In the US the spending limit is again a topic but I expect traders to be rather tired of it – only if the date becomes imminent will the topic find attention.

Remain nimble and watch for any signs that confirm or reject the expected rate scenario.

Key Events.

Monday

US Holiday
- Data Sweden CPI, EU Trade Balance, UK Houseprices

Tuesday
- Data Germany HICP & ZEW, Canada CPI,
- Earnings: Goldman Sachs, Morgan Stanley, Interactive Brokers,

Wednesday
- Data China GDP, Retail Sales, UK CPI, EU HICP, US Retail Sales,
- Earnings: Alcoa, Charles Schwab, US Bancorp,

Thursday
- Data Initial Jobless Claims, Philly Fed,
- Earnings: TSMC,

Friday
- Data Japan CPI, UK Retail Sales EU Consumer Confidence,