Morning Brew April 4 2022

Morning Brew 1 minute to read

Erik Schafhauser

Senior Relationship Manager

Summary: The calm before the storm?

Good Morning,

The EU is considering stronger sanctions against Russia on accusations of war crimes and even German politicians are starting to demand an import stop for Russian gas. So far markets are not really reacting. Oil only gains minutely and Equities start the week on a friendly note overall – but gains are only insignificant so far.

The GER40 is trading at 14544 ant the 50 day moving average is the next key resistance at 14624, the US30 34865 and needs to breach the 35k, US500 is somewhat mid range at 4555 an the USTech 100 also in undecided territory at 14882,

EURUSD is off recent highs at 1.1040 with still falling implied Vol, GBPUSD 1.3120 and Gold and Silver looking for clues at 1921 and 24.77.

Bitcoin is hovering below the 47k.

Inflation is becoming a tabloid subject in Germany with Bild publishing lists of price increases at Aldi and publishing tips on how to cook cheaper. This will cause significant pressure on the government to try to influence the ECB.

In the US the 2710 year yield curve has inverted, usually a sign of a recession and the Fed Minutes on Wednesday will be closely watched in that background.

China is showing some flexibility towards US transparency requirements as it is considering to adapt confidentiality rules that would allow Chinese Companies to comply with US reporting requirements.

Amazons new union will start tariff negotiations in May.

Tesla reported record Q1 deliveries but is so far not able to relaunch production in it`s Shanghai factory.

Today we are watching for News arround EU Sanctions and any hint of an energy boycott against Russia, comments on the inverted US Yield cuve by central bankers and in terms of economic data the Turkish CPI at 9, EU Sentix index at 10:30 and US Factory Orders at 16:00

Tomorrow there will be a flurry of international PMIs with EU at 10 and US at 15:45 key.

Expiries
Physically Settled Futures:

WK2 will expire 6th April at 09:00 GMT
FPJ2 will expire 11th April at 15:00 GMT

Expiring CFDs:

GASOILUKAPR22 will expire 8th April at 15:00 GMT

LEANHOGSAPR22 will expire 12th April at 15:00 GMT

Outrageous Predictions 2023: The War Economy

Billionaire coalition creates trillion-dollar Manhattan Project for energy
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.
Read article
French President Macron resigns
The 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.
Read article
Gold rockets to USD 3,000 as central banks fail on inflation mandate
As 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
Read article
EU Army forces EU down path to full union
With 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.
Read article
A country agrees to ban all meat production by 2030
In 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.
Read article
UK holds UnBrexit referendum
Following a recession and domestic pressure, the United Kingdom is thrown into political turmoil that will end with a vote to wind back Brexit.
Read article
Widespread price controls are introduced to cap official inflation
History 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.
Read article
OPEC+ & Chindia walk out of the IMF, agree to trade with new reserve asset
Sanctions 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.
Read article
USDJPY fixed to the USD at 200 as Japan overhauls financial system
Following 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.
Read article
Tax haven ban kills private equity
With 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.
Read article

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Morning Brew April 4 2022

Erik Schafhauser

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Latest Market Insights

Outrageous Predictions 2023: The War Economy

Billionaire coalition creates trillion-dollar Manhattan Project for energy

French President Macron resigns

Gold rockets to USD 3,000 as central banks fail on inflation mandate

EU Army forces EU down path to full union

A country agrees to ban all meat production by 2030

UK holds UnBrexit referendum

Widespread price controls are introduced to cap official inflation

OPEC+ & Chindia walk out of the IMF, agree to trade with new reserve asset

USDJPY fixed to the USD at 200 as Japan overhauls financial system

Tax haven ban kills private equity

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