Senior Relationship Manager
Summary: Yields and Oil rise
Good Morning
Ax expected, yesterday was not the most volatile of days given the US Holiday.
The Bank of Japan left rates upgraded its inflation forecasts on Tuesday, the JPY tested the 115 and the 200hMA level and failed to break higher so far.
Equities are under pressure this morning as rising oil prices dampen the mood and fuel inflation fears. A drone attack in the UAE and receding worries on Omicron let prices rise. Brent has broken above the double top 2018 and Q4 2021.
US Indexes are trading app. 0.5% lower with the US30 at 35853 the US 500 at 4640 and the US Tech 100 at 15443. The GER30 trades at 15890.
US yields rose to 1.84 and the German 10 Year is approaching 0, currently at -0.022 and a new high since Q2 2019
EURUSD is trading at 1.1400, GBPUSD 1.3640 and the USD Index 95.30
Gold hovers at 1816 and Silver just below the 22.95. So far the old rule that Gold follows oil higher is not the case.
Bitcoin remains stable to 42300 with a study by Genesis Trading showing that the investor base into bitcoin is becoming more stable. The amount of bitcoin held in digital wallets with no outflows for more than five months has been steadily increasing and The number of bitcoins that haven't been traded in 12 months moved in over a year has been rising steadily in the last 6 months.
UBS has reached levels not seen since early 2018, in view of 18 CHF again, while the resignation of Horta-Osorio, the stock fell to 9.3 as the focus was more on the fact that there was a further issue and not on the fact that that there had been a solution.
Airline executives in the US warned of an aviation crisis if 5G is rolled out as currently planned because airlines failed to get their planes ready in time. The US could be looking at more than 1,100 flights daily could be cancelled.
Rio Tinto expects slightly weaker iron ore shipments in 2022
German UK Labor Data at 8:00 the German ZEW at 11:00 ,the Canada CPI 14:30
Key earnings today earnings Goldman Sachs, Interactive Broker and Charles Schwab
Expiries
Physically Settled Futures:
CLG2 will expire 20th January 2022 at 16:00 GMT.
ECOG2 will expire 23th January 2022 at 10:00 GMT.
NGG2G2 will expire 27th January 2022 at 10:00 GMT.
GCG2, MGCG2 will expire 28th January 2022 at 16:00 GMT.
Expiring CFDs:
OILUSFEB22 will expire 18th January 2022 at 16:00 GMT.
NATGASUSFEB22 will expire 25th January 2022 at 16:00 GMT.
INDIA50JAN22 & TAIWAN95JAN22 will expire 27th January 2022 at 02:00 GMT.
GASOLINEUSFEB22, GOLDFEB22 & HEATINGOILFEB22 will expire 27th January 2022 at 16:00 GMT.
CHINA50JAN22, HK50JAN22 & SINGAPOREJAN22 will expire 28th January 2022 at 02:00 GMT.
Futures can be rolled online via the Futures Spread Trade Ticket. Any open positions will be closed after the mentioned times.
Trade safely.
AI: The good, the bad, and the bubble
While a deep recession may not be iminent thanks to central bank policy, interest rates will have to stay high for longer, and this will be accompanied by volatility risk from the unwinding of bubbles, especially within AI.
Steen Jakobsen,
Chief Investment Officer
The emergence of advanced AI systems is by far the most surprising event this year, turning everything upside down, while risks and benefits are debated. AI will also become an arms race between the US and China.
Peter Garnry,
Head of Equity Strategy
As China navigates global fragmentation, its cycle of technology application, productivity enhancement, and growth is threatened by US breakthroughs in generative AI, limited computing power, and geopolitical tensions.
Redmond Wong,
Market Strategist
Japan’s expertise in semiconductors and robotic integration could be the foundation of AI dominance. Combining two of this year's themes, Japanese equities and artificial intelligence, brings a wave of opportunities.
Charu Chanana,
Market Strategist
The AI fever has turned the technology into a darling, pushing crypto further into no-man’s-land. There are striking similarities between AI and crypto, and if these are to come full circle, AI won't be spared for bubbles.
Mads Eberhardt,
Cryptocurrency Analyst
Stocks related to artificial intelligence (AI) have appeared on investors' radars. Expectations are high, but it may be necessary to consider how to get exposure to AI in a diversified way.
Hans Oudshoorn,
Trainer Academy
The USD is on its back foot as markets celebrate an eventual Fed rate peak and steady long US yields. The stakes are even higher for the Japanese yen if longer major sovereign yield curves have to price in economic acceleration.
John J. Hardy,
Head of FX Strategy
While commodities, broadly speaking, have faced some tough months, a partial reversal during June could signal that the asset class is getting back on its feet with energy holding up and precious metals with upside potential.
Ole S. Hansen,
Head of Commodity Strategy
As inflation remains high central banks face hard decisions about whether they should keep hiking interest rates or stop. Meanwhile, the rise of AI creates bubble-like conditions that only make the decision harder.
Althea Spinozzi,
Senior Fixed Income Strategist