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
A new fragmented world order can render some of today's infrastructure obselete, but it also calls for massive new investments across the globe, which requires a new set of strategic and tactical investment strategies.
Steen Jakobsen,
Chief Investment Officer
As globalisation turns to fragmentation, China seems set on playing a role in the global economy, while simultaneously working towards proofing its own economic situation from external shocks and crises.
Redmond Wong,
Market Strategist
The recent bank runs and ensuing challenges are reminicent of something we've seen before. Will it end like the S&L crises of 1986 and 1995?
Chris Dembik,
Head of Macroeconomic Research
Equity markets need to recalibrate to another - fragmented - global world. What's your view on equities in this market - are they going up or down?
Peter Garnry,
Head of Equity Strategy
With every development comes new opportunites, some of which could be in India. Have you considered the country as a part of your diversification strategy?
Charu Chanana,
Market Strategist
A collar is an option strategy that allows some protection while maintaining some upside potential. What investment would you like to use a collar strategy for?
Hans Oudshoorn,
Trainer Academy
There are arguments to be made for many commodities to have upside. Which are you paying the most attention to this quarter?
Ole S. Hansen,
Head of Commodity Strategy
In a very challenging macro environment, which currencies do you think will come out on top?
John J. Hardy,
Head of FX Strategy