Morning Brew July 27 2022

Good Morning,

Wallmarts results weighed on the  Retail sector yesterday and caused risk off sentiment to gain traction. Wallmart itself lost 7.6%, Amazon 5.2% and  Target 3.6%

The Dow Jones lost 0.7% the S&P 500 1.2% and the Nasdaq 1.9%.  positive results came from 3M, Coca Cola, Mc Donalds, and GE. Microsoft and Alphabet reported after the bell and while Microsoft is slightly down while Alphabet could gain. This boosts overnight sentiment. Traded Volumes were again below the average.

In the FX Market, the Euro gave up ground on Russian Gas sanctions and the political mess in Italy. It is trading at 1.0140 against the USD and 0.9750 against the CHF. The USD Index gains to 107

Gold, Silver and Bitcoin are fairly stable at 1720, 18.65 and 21200. Coinbase shares fell 21% on an SEC Probe and the news that ARK sold 1.4 mio shares.

Credit Suisse is restructuring and appointed Ulrich Koerner as its new chief executive as the bank reported a loss of CHF 1.59 bio against an expectation of CHF -206

Deutsche Bank reported a higher than expected Q2 profit, Danone raises it`s outlook

The International Monetary Fund cut global growth forecasts again from a global 3.6% to 3.2%.

The German consumer confidence fell to the lowest level ever on worries over Russian gas deliveries and how Germany may be affected.

Today, the US rate decision is key but the US Durable goods orders at 14:30 will also be significant.

The Rate decision is at 0:00 CET and Powell`s speech scheduled 30 minutes later. From the FOMC a 75bp hike is expected with a probability of 87%,  to 2.25%–2.50%, The remaining 13% call for 100bp Further  75bp of hikes are expected this year before before reversing to cuts next year.

That the market has reverted to pricing in cuts next year emphasizes growing concern that the global economy is already rolling over. If nothing else, consider 2s/10s Treasuries already trading 25bp inverted

Bloomberg reports a huge 67,000 contracts hawkish bet on Secured Overnight Financing Rate  Futures. December 2022 contracts were bought and December 2023 contracts were sold in a bet that the gap between the two will widen as the swaps market prices in fewer Fed rate cuts. The trade is worth  app. 1.7 mio per basis point.

Key earnings:

• Wednesday 27 July:  Meta, Qualcomm, AMD, Equinor, GSK, ServiceNow, Rio Tinto, Mondelez, Boeing, AirbusKering, Humana, Mercedes-Benz, Ford Motor, Kraft Heinz, Shopify, BASF, Danone, Fanucm Enphase Energy, Spotify, Garmin
• Thursday 28 July: Apple, Nestle, Pfizer, Merck, L’Oreal, Shell, Comcast, Intel, Linde, TotalEnergies, Sanofi, Honeywell, Anheuser-Busch InBev, Keyence, Volkswagen, Air Liquide, Schneider Electric, Banco Santander, Valero Energy, Stellantis, Neste, BAE Systems, Arcelor Mittal
• Friday 29 July: Amazon, Exxon Mobil, P&G, Mastercard, Chevron, AbbVie, AstraZeneca, Sony, Caterpillar, Colgate-Palmolive, BNP Paribas, Twilio, Pinterest

• Expiries
•         Physically Settled Futures:
• NGQ2 will expire on 26^th July at 19:30 GMT.
• TTFMQ2 will expire on 27^th July at 09:00 GMT.
• STFQ2 will expire on 28^th July at 02:00 GMT.
• EMAQ2 will expire on 28^th July at 09:00 GMT.
• GCQ2, MGCQ2, XKQ2, ZLQ2, ZMQ2, ZSQ2 will expire 28^th July at 15:00 GMT.
• Expiring CFDs:
• OILUKSEP22 will expire 29^th July at 15:00 GMT.