Quarterly Outlook
Fixed Income Outlook: Bonds Hit Reset. A New Equilibrium Emerges
Althea Spinozzi
Head of Fixed Income Strategy
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Morning Brew December 13 2022
Erik Schafhauser
Senior Relationship Manager
Summary: Fasten your Seatbelts
Good Morning,
Today the massive round of Data releases kicks off in earnest :
Tuesday: German CPI, ZEW, UK Labor data, US CPI
Wednesday: Japanese Tankan, UK CPI& PPI, EU Industrial Production, FOMC Rate decision
Thursday: China Retail Sales, Swiss National Bank, Danish Central Bank, Bank Of England and the ECB set rates, US Retail Sales
Friday: UK Retail Sales, International PMI, Quarterly Expiry
Key event today is clearly the US CPI at 14:30, the Core is expected at 6.1% and the overall number at 7.3% - to underline the significance, based on Reuters Data, the S&P 500 moved app 3% after the last 6 CPI releases and today, traders are expecting 2.5%.
Detailed US CPI and FOMC Preview – read here.
Before that we are expecting the German HICP and the UK Labor data at 8:00, the German ZEW Survey comes at 11:00.
Yesterday risk received a boost with lower US inflation expectations after it initially sold off on rising rates. Microsoft could gain after announcing that it would take a stake of the London Stock Exchange.
US 10 Year yields are trading at 3.6%, the USD Index at 105, EURUSD at 1.0550, GBPUSD 1.2288, USDJPY 137.50. Gold is trading 1786, Silver 23.47. While Silver has broken solidly above the 200 day Moving average, gold remains slightly below. Oil could gain on the shut pipeline in the US and China`s reopening, it traded 5% over yesterday`s lows.
Other headlines are
- Sam Bankman-Fried has been arrested
- The U.S. Department of Energy announce that scientists at a national lab have made a breakthrough on fusion
- Japan and the Netherland have agreed in principle with the U.S. to join the latter in restricting the exports of advanced chipmaking machinery and equipment to China
- The EU agrees on a minimum tax of 15%
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