Morning Brew April 8 2022
Senior Relationship Manager
Markets are looking for direction as high yields weigh on risk sentiment and new sanctions hit Russia. Imports of wood and coal are no longer allowed and Ursula von der Leyen is travelling to Ukraine presently.
Mixed comments from central bankers: Bostic and Evans were a little dovish while James Bullard who called for hikes totaling to 3% this year.
Equities could stabilize a little over night but if there is no real surprise today we are looking at a negative week. US 30 is trading at 34600 the US500 at 4500, the USTech100 at 14560 and the GER40 at 14160
Bitcoin fell to 43500 despite Robin hood announcing access to crypto currencies for 2 million users.
US 10 year yields remain near the high at 2.66 and the USD Index is approaching the 100. Gold and Silver remain in their range at 1930 and 24.60, EURUSD trades below 1.09 still at 1.0860, GBPUSD 1.3065 and USDJPY is toying with the 124 at 123.97 The Bund Future is near the years lows at currently 156.97 UK Oil is trading at 100.80.
Tesla closed at 1056 and Nvidia 241.
It is feared that Russia is preparing an offensive in Ukraine so there is little hope of peace and there might be a consensus for tougher sanctions on Russian energy. The United Nations General Assembly suspended Russia from the U.N. Human Rights Council
We saw a huge increase in consumer credit yesterday, the expectation was 16 bio and the actual 42 bio.
Today the economic agenda is thin, with Norways GDP at 8, the Greek CPI at 11, Canada`s employment date at 14:30 and US wholesale inventories at 16:00
We still have huge amounts of cash on the sidelines looking to be invested, this could cause a rebound in equities if there are no negative surprises but that is not unlikely to happen in the current environment. Caution remains in order in my view, consider optionality.
Latest Market Insights
Q4 Outlook 2022: Winter is coming
- Winter is coming to the financial markets as central banks are tightening their grip. How spring will look is still a question.
European energy crisis: it will get worse before it gets betterThe winter in Europe will be tough, but whether the result is political chaos or sustainable, innovative solutions is still undecided.
A difficult and volatile quarter awaitsAs the year draws to an end, commodities continue to be at centre stage of the world with growth pockets political uncertainty.
The bright side: crises drive innovationThe positive spin on crises is that they come with solutions. It is worrisome that deglobalisation may be a response to this crisis.
Green transformation in China: renewable energy and beyondGoing green, China needs to span numerous energy sources to ensure stability, as every source comes with a challenge.
Asia: Intermittent solutions, but a faster renewable adoption curveAsian energy supply is being squeezed. This and the adoption of renewables may change the investment sentiment in the region.
FX: A Fed thaw needed to deliver a sustained USD turn lowerThe US Dollar can keep momentum when the Federal Reserve continues to tighten, leaving the rest to play to their drum.
Autumn can become ugly for equities and bond holders. Comfort for Dollar longsTechnical analysis suggests that equities could face a tough Q4 as could fixed income. US Dollar positions could provide some upside.
The next stock market sector to watch, with stocks going nuclearAs the world scrambles to find affordable, sustainable energy, nuclear is getting attention from politicians and investors alike.
The crypto space is getting cold when the hype disappearsCryptocurrencies face a winter of their own as retail investors and governments are asking tough questions.