Morning Brew March 16 2022
Senior Relationship Manager
Summary: Equities Risk On ahead of the FOMC supported by China hopes.
Comments by the Vice Primier of China cause a surge in Chinese Equities and overall risk on in equities. Hopes are the Chinese government will take steps to support the economy in the recent corona spike.
At the same time Ukranian President Zelenskiy is calling peace talks more realistic, US President Biden will attend the NATO Summit
It is not fully clear acc to Reuters if Russia defaulted on it`s debt. There is a grace period until April 15.
Today the US Retail sales will be released at 13:30 CET and the FOMC Rate decision will be released at 19:00, followed by the press conference at 19:30.
Expectation has shifted a little since Monday, futures now indicate a 87% probability for a 25 BSP hike and 13 for 50, Monday the split was 93/7. Our Steen Jacobsen expects a clear message that the Fed sees 75 BPS hikes required until after the May 4 meeting. So if there are only 25 BPS today, Powell will strongly hint at 50 BPS in May.
Indexes gained yesterday as the PPI came a little lower than feared and over night could record further gains.
Hong Kong is up almost 10%, the US500 2.7% and Dax 1.88.
US 10 year yields remain high at 2.19, the USD Index falls to 98.8. EURUSD is just below the 1.10 level at 1.0965 and GBPUSD at 1.3043. Gold and Silver 1915 and 24.80.
Remain extremely cautious in all directions today as markets should be news driven and very nervous.
Quarterly Outlook Q2 2022
Quarterly Outlook Q2 2022: The End Game has arrived
- Shocks from covid and the war in Ukraine have forced the global financial and political world to change, but what will the end game be?
Productivity and innovation have never been more importantAs the world economy hits physical limits and central banks tighten their belts, could equities be facing a 10-15% downside?
The great EUR recovery and the difficulty of trading itIf the terrible fog of war hopefully lifts soon, the conditions are promising for the euro to reprice significantly higher.
Tight commodity markets – turbocharged by war and sanctionsWith supply already tight, commodities keep powering on. But will it last for yet another quarter?
Between a rock and a hard placeGeopolitical concerns will add upward price pressures and fears of slower growth, while volatility will remain elevated.
The Great ErosionInflation is everywhere and central banks try to combat it. But will they get it under control in time?
Australian investing: Six considerations amid triple Rs: rising rates, record inflation and likely recessionWhile global financial markets are struggling in an uncertain world, the commodity-heavy Australian ASX index is poised to keep a positive momentum.
Cybersecurity – the rush to catch up with realityWith the invasion of Ukraine, governments and private companies are rushing to reinforce their cyber defenses.