Erik Schafhauser Zürich Erik Schafhauser Zürich Erik Schafhauser Zürich

Morning Brew February 2 2023

Morning Brew 1 minute to read
Erik Schafhauser

Senior Relationship Manager

Summary:  Powell boosts markets, Zuckerberg helps, ECB and BoE next


Good Morning, 

Sometimes it is nice to be right. The Fed yesterday did the expected and hiked by 25 basis points. Powell then spoke at the press conference and while many of his statements were fairly hawkish, he also said a “disinflationary” process was underway and this triggered the belief that we were indeed looking at the mentioned “Two and Done”. Where yesterday we were trading a peak rate of 4.9% in May / June, we are now at 4.8% , This was enough to trigger a strong rally across instruments:

10 year Yields fell to 3.42 an the USD Index dropped from 102.59 on Jan 31 to 100.78. EURUSD broke above 1.10 and also above the 50% retracement of the larger downtrend, USDJPY is trading at 128.60 and Gold and Silver rally to 1953 and 24.20. 1960 and 24.50 are significant resistances to keep an eye on.

The US500 as well as the US tech100 gained significantly and both broke above their 50 week moving average having risen 1 and 2% respectively, the US30 hardly blinked. The GER40 is testing recent highs at 15280 and a brake above will open the way to 15750.

AMD gained 13% yesterday while electronic arts fell 9%. Meta shares jumped 19% higher after the bell on announcing a $40 billion increase in its share buyback as well as lifting guidance for Q1.

Deutsche Bank announced an annual profit for the third time in a row now, quarterly profit came at twice the expectation (€1.8 Bio) Sony reports a decline in profits but manages to beat expectations.

Looking ahead, we are waiting for the Bank of England`s rate decision today at 13:00 and the ECB at 14:15 followed Mme Lagarde’s Press conference at 14:45. Both central banks are seen to hike by 0.5% with a probability for the BoE and 91.5% for the ECB.

After the Bell, Amazon, Apple and Alphabet will report earnings

Tomorrow the Nonfarm Payroll will be the key event – expected at 185k. The EU PPI as well as international PMI could also move markets.

Difficult to trade but important is the development around Adani Group in India where Hindenburg Research launched a short selling attack, stating the group was massively overvalued and raising accusations on various malpractices. A planed share sale fell though and  the Group lost 100 bio in value.

Today

Band Of England, ECB Rate decision

Earnings:   Merck, Lilly, Honeywell, Sony, Amazon, Apple, Alphabet, Ford, Qualcomm, Starbucks, Gilead,

Friday

EU PPI International PMI, Nonfarm Payroll

Earnings:  Cigna, CBoe, Sanofi

Expiries

        Physically Settled Futures

LEG3 will expire 03 Feb 2023

WH3 will expire 03 Feb 2023

FPG3 will expire 09 Feb 2023

Expiring CFDs

LIVECATTLEFEB23 will expire 02 Feb 2023

GASOILUKFEB23 will expire 08 Feb 2023

 

Disclaimer

The Saxo Bank Group entities each provide execution-only service and access to Analysis permitting a person to view and/or use content available on or via the website. This content is not intended to and does not change or expand on the execution-only service. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Rules of Engagement and (v) Notices applying to Saxo News & Research and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Bank Group by which access to Saxo News & Research is gained. Such content is therefore provided as no more than information. In particular no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Bank Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Bank Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on Saxo News & Research or as a result of the use of the Saxo News & Research. Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Bank Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. Saxo News & Research does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of our trading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication under relevant laws.

Please read our disclaimers:
Notification on Non-Independent Investment Research (https://www.home.saxo/legal/niird/notification)
Full disclaimer (https://www.home.saxo/legal/disclaimer/saxo-disclaimer)
Full disclaimer (https://www.home.saxo/legal/saxoselect-disclaimer/disclaimer)

Saxo Bank (Schweiz) AG
The Circle 38
CH-8058
Zürich-Flughafen
Switzerland

Contact Saxo

Select region

Switzerland
Switzerland

All trading carries risk. Losses can exceed deposits on margin products. You should consider whether you understand how our products work and whether you can afford to take the high risk of losing your money. To help you understand the risks involved we have put together a general Risk Warning series of Key Information Documents (KIDs) highlighting the risks and rewards related to each product. The KIDs can be accessed within the trading platform. Please note that the full prospectus can be obtained free of charge from Saxo Bank (Switzerland) Ltd. or the issuer.

This website can be accessed worldwide however the information on the website is related to Saxo Bank (Switzerland) Ltd. All clients will directly engage with Saxo Bank (Switzerland) Ltd. and all client agreements will be entered into with Saxo Bank (Switzerland) Ltd. and thus governed by Swiss Law. 

The content of this website represents marketing material and has not been notified or submitted to any supervisory authority.

If you contact Saxo Bank (Switzerland) Ltd. or visit this website, you acknowledge and agree that any data that you transmit to Saxo Bank (Switzerland) Ltd., either through this website, by telephone or by any other means of communication (e.g. e-mail), may be collected or recorded and transferred to other Saxo Bank Group companies or third parties in Switzerland or abroad and may be stored or otherwise processed by them or Saxo Bank (Switzerland) Ltd. You release Saxo Bank (Switzerland) Ltd. from its obligations under Swiss banking and securities dealer secrecies and, to the extent permitted by law, data protection laws as well as other laws and obligations to protect privacy. Saxo Bank (Switzerland) Ltd. has implemented appropriate technical and organizational measures to protect data from unauthorized processing and disclosure and applies appropriate safeguards to guarantee adequate protection of such data.

Apple, iPad and iPhone are trademarks of Apple Inc., registered in the U.S. and other countries. App Store is a service mark of Apple Inc.