Senior Relationship Manager
Summary: Markets cautions into CPI and ECB week, Earning Season kicks off with moderate expectations.
Good Morning,
Yields rise ahead of the US CPI and the ECB rate decision this week, the US 10 Year is trading at 2.76 weighing on Equities, the USD Index falls slightly as the Euro could gain on the French election result. The Bund Future is at the lowest since 2015.
Stocks ended the week on a weak note with the S&P -1.26%, the Dow -0.27% and the Nasdaq -3.86%, the Nasdaq closed a few points below key support at 14,342. The GER40 held above support at 13,989 and is currently at 14175. Higher rates are putting pressure on growth stocks and semiconductors in particular.
EURUSD is at 1.0890 and GBPUSD testing the 1.30 to the downside, USDJPY broke above 125 and Bitcoin continued it`s decent but held above the 50d SMA. Currently we are trading at 42,240. EURUSD had initially gained 80 pips inthe open but failed to hold there.
December Wheat in Europe is trading at a new high, almost 40% higher then in January.
Marcron leads in French election but must meet Le Pen in a runoff election on April 24
China Inflation comes higher than expected at PPI 8.3 vs 7.9% expected and the CPI at 1.5% vs 1.2% expected.
Elon Must has apparently decided not to join the board of Twitter, this could make for interesting stock moves.
The earnings season is kicking off and the following companies are on our radar for the week. Analysts expect S&P 500 earnings to have increased by about 6% in the first three months of 2022 from a year ago and forecast profit growth of about 9% for the year,
Economic data:
Key events this week will be the US CPI on Wednesday and the ECB on Thursday. Inflation is well above the ECB forecast and we could see hawkish comments.
Any developments around Ukraine and further sanctions will also be of key importance as there seems to be no end to the war in sight.
Trade carefully.
2024: The wasted year
Markets are driven by election optimism, overshadowing growing debt and liquidity concerns. The 2024 elections loom large, but economic fundamentals and debt issues warrant cautious investment.
As US economic slowdown hints at a shift away from exceptionalism, USD faces downside with looming Fed cuts. AUD and NZD set to outperform as their rate cuts lag. JPY gains on carry unwind bets and BOJ pivot.
Amid AI and obesity drug excitement, equities see varied prospects: neutral on overvalued US stocks, negative on Japan due to JPY risks, positive on Europe. European defence stocks gain appeal.
With the economic slowdown, quality assets will gain favour, especially sovereign bonds up to 5 years. Central banks' potential rate cuts in Q2 suggest extending duration, despite policy and inflation concerns.
Commodities poised for rebound. The "Year of the Metal" boosts gold and silver, copper awaits rate cuts. Grains may recover, natural gas stabilises. Gold targets $2,300-$2,500/oz, copper's breakout could signal growth.
Markets are driven by election optimism, overshadowing growing debt and liquidity concerns. The 2024 elections loom large, but economic fundamentals and debt issues warrant cautious investment.
As US economic slowdown hints at a shift away from exceptionalism, USD faces downside with looming Fed cuts. AUD and NZD set to outperform as their rate cuts lag. JPY gains on carry unwind bets and BOJ pivot.
Amid AI and obesity drug excitement, equities see varied prospects: neutral on overvalued US stocks, negative on Japan due to JPY risks, positive on Europe. European defence stocks gain appeal.
With the economic slowdown, quality assets will gain favour, especially sovereign bonds up to 5 years. Central banks' potential rate cuts in Q2 suggest extending duration, despite policy and inflation concerns.
Commodities poised for rebound. The "Year of the Metal" boosts gold and silver, copper awaits rate cuts. Grains may recover, natural gas stabilises. Gold targets $2,300-$2,500/oz, copper's breakout could signal growth.