Morning Brew July 6 2022
Senior Relationship Manager
Summary: Markets are on edge
Yesterday was an interesting day, US Equities closed somewhat friendly with the Dow down 0.42%, the S&P 500 up 0.16% and the Nasdaq up 1.75%. Key movers were the USD which gained substantially and Metals which came under severe pressure on growth fears. Copper is down almost 30% since late May, Gold and Silver are trading 1763 and 18.95. The US Yield Curve inverted, as two-year Treasuries rose above the 10-year. 2 years are at 2.806 and 10 at 2.79.
EURUSD fell to 1.0239 low , currently 1.0250 and GBPUSD at 1.1930. The Pound is further stressed by pressure on BoJo as two ministers resign and express their lack of confidence in him, in various news outlets his resignation is not unlikely. The 1 month Implied Vol of an EURUSD ATM Option is 11%, GBP 12. From a technical view, EURUSD has room for parity. The USD Index is trading at 106.63
German Industrial orders were released stronger than feared at +0.1% vs -0.6% expected,.
Voyager Digital has filed for bankruptcy, , a week after suspending withdrawals. Acc to Reuters, Voyager estimates that it had more than 100,000 creditors holding somewhere between $1 billion and $10 billion in crypto assets.
EU Retail Sales at 11:00 and the US PMI will be in focus. In the evening, the Fed minutes will be closely watched.
Besides the economic data, any news on Gas deliveries to Europe will be closely watched and comments out of central banks and from politicians to adress the current turmoil as well.
Latest Market Insights
Quarterly Outlook Q3 2022: The Runaway Train
- Central banks' attempts to kill inflation is a paradigm shift, which could end in a deep recession.
Tangible assets and profitable growth are the winnersWith US equities officially in a bear market, the big question is where and when is the bottom in the current drawdown?
Understanding the lack of investment appetite among oil majorsThe everything rally seen in recent quarters has become more uneven, as its strength is driven by commodities in short supply.
The pressure is on as the wind leaves the sailsWith cryptocurrencies in sharp decline, are we entering a crypto winter or is the bear market a healthy clean-up of the crypto space?
Why the Fed can never catch up and what turns the US dollar lower?Many other central banks are set to eventually outpace the Fed in hiking rates, taking their real interest rates to levels higher than the Fed will achieve.
Bank of Japan: Swimming against the tideThe Japanese economy has gone from the age of deflation to rapidly rising prices in no time, leaving the Bank of Japan in a pickle.
Green transformation detour and bear market hibernationWith the impending risk of global econonomic derailment, we share the five things investors need to consider in this new half year.
Crisis redux for the eurozone?Whether there's going to be a recession in Europe or not, the path towards a stable economy will be agonizing.
Technical Outlook: Gold, Oil and a remarkable multi-decade perspective on EquitiesThe Nasdaq bubble pattern, USDJPY resistance, crude oil uptrend losing steam and the technical outlook for USD.
China: the train of new development paradigm left the station two years agoChina is transiting to a new development paradigm, as they are hit by deteriorating terms of trade, a slower global economy and an uncertain future while continuing attempts to contain the pandemic.