Morning Brew April 19 2022
Senior Relationship Manager
Summary: Markets waiting for clues
Markets remain on the edge with worries on Ukraine, China , Rate Hike fears and rising commodity prices weigh on risk sentiment but movements are fairly small.
The USD Index rose above 100 again to trade at 100.80, EURUSD trades at 1.0770 and GBPUSD fell below the 1.30 to trade at 1.2990. Gold and Silver 1975 and 25.75.
Japanese Officials state worries on the weakening yen, and that the damage to the economy is greater than the benefits accruing to it, we are currently trading at 128.15,
Equities are in Limbo with the US30 trading at 34500, the US500 at 4400, the USTECH100 just below the 14000 and the GER40 holding above at 14080
This week will be dominated by earnings, news around Elon Musks takeover of Twitter or the failure thereof, Earnings by Tesla tomorrow, Ukraine and Inflation.
The lockdowns in China are causing a pile up of ships that is giving a hint of supply chain disruptions coming up and we can expect negative news that I am not sure are fully priced in.
Earnings this week:
- Tuesday: Haliburton, Johnson &Johnson, Netflix, Lockheed Martin
- Wednesday: Tesla, Alcoa, P&G, Nasdaq
- Thursday: American Airlines, Snap, AT&T
- Friday: Amex, Verizon, SAP, Schlumberger
- Tuesday: Canadian and US Housing data at 14:15 and 14:30
- Wednesday: German PPI at 08:00EU Industrial Production at 11:00, CA CPI at 14:30
- Thursday: EU HICP at 11, US Labor Data at 14:30
- Friday: UK CPI at 8:00, International PMI
Latest Market Insights
Outrageous Predictions 2023: The War Economy
- The constantly growing global need for energy drives the world's richest to huddle up and launch a R&D project in a size the world hasn't seen since the Manhattan Project gave the US the first atomic bomb.
French President Macron resignsThe political stalemate in France and the rise of Marie Le Pen following the 2022 elections corners President Macron, forcing him to give up on politics and resign from his position. At least for now.
Gold rockets to USD 3,000 as central banks fail on inflation mandateAs markets and central banks realise that the idea that inflation is transitory is wrong, and that prices will remain higher for longer, gold is sent through the roof, hitting a price tag of USD 3,000
EU Army forces EU down path to full unionWith continued challenges in the region and a US military that isn't aggressively enacting its former role as global policeman, the European Union agrees to create its own armed forces, bringing the whole region closer.
A country agrees to ban all meat production by 2030In an effort to become one of the global leaders on the path to net-zero emissions, one country decides to not only put a heavy tax on meat, but to ban domestic production entirely.
UK holds UnBrexit referendumFollowing a recession and domestic pressure, the United Kingdom is thrown into political turmoil that will end with a vote to wind back Brexit.
Widespread price controls are introduced to cap official inflationHistory tells us that with the war economy comes rationing and price controls. And this time is no different, as policymakers introduce strict price controls that lead to a range of unintended consequences.
OPEC+ & Chindia walk out of the IMF, agree to trade with new reserve assetSanctions against Russia have caused widespread turmoil due to US Dollar moves in countries across the globe that don't consider the US an ally. To relieve themselves from this, they leave the IMF and create a new reserve asset.
USDJPY fixed to the USD at 200 as Japan overhauls financial systemFollowing the challenges that faced the Japanese Yen in 2022, the Bank of Japan attempts to keep the currency from sliding. Unsuccessful on the long-term, Japan will launch a reset of its entire financial system.
Tax haven ban kills private equityWith the war economy comes an increased focus on national interests and sovereign nations' ability to assert themselves. In that regard, the OECD countries turn their attention on tax havens and pull the big guns out, banning them altogether.