Morning Brew May 10 2023

Good Morning

Markets were rather quiet while I was travelling. Focus is clearly on the CPI Release today at 14:30 with the core expected at 5.5% and the overall annual number at 5%. As Jerome Powell stated the Fed would decide the rate path based on data going forward, this release will be considered as very important for future guidance.

Interest Rate Traders still see no change at the next FOMC meeting in June but overall more than 2 cuts by year end. Also, talks around the debt ceiling are not progressing but continue and that is weighing on overall sentiment and causing traders to load up on put options on equities while the Vix Index remains low. 

2 year yields in the US are at 4.05% and the USD Index at 101.60, EURUSD 1.0970, GBPUSD 1.2625 and USDJPY 135.33. Gold and Silver are trading at 2030 and 25.60.

Equities are need a push either way for a clear direction, the most important level seems to be the 4200 in the US 500. A break above would open the way to test all-time highs. Currently the Index is trading at 4125, the US Tech 100 at 13214 and the GER40 at 15961. Toyota very strong results in fiscal Q4

The big question remains from where the next large impulse will come, there are several candidates starting with inflation and rates, the debt ceilings as well as geopolitics in the short term.

• Today 
  Data: US CPI
  Earnings:  Blackstone, Teva, First Citizen Bankshares, Unity, Beyond Meat, Robinhood
  
  

Thursday: 
Data:China CPI and PPI, UK Rate decision, US Initial Jobless claims and PPI Machine Manufacturing,
Earnings:  JD.COM, IONQ, Getty Images,

• Friday: 
  Data: UK GDP, France CPI, US Import Prices, University of Michigan Confidence.