Morning Brew March 16 2023

Good Morning,

Worries over Credit Suisse drove off sentiment yesterday but  assurances by the Swiss National Bank that they would extend liquidity to CS eased the worries.

In New York the share rose from 1.75 to 2.16 after news the SNB stepped in and markets recovered overall.

There were wild swings in many assets yesterday bordering panic, we are seeing a general recovery of sentiment, the US500  is at 3905 after yesterdays low of 3830, the GER 40 is at 14940 after 14683, Gold 1915 after a high of 1937.

EURUSD gained to above 1.06 again after 1.0517 yesterday, GBPUSD perfectly hit the200h ma  at 1.2013 yesterday and rose to 1.2070 now.

The question at large remains if governments and central banks can maintain the calm and support a recovery or if we see a dominance of worry.

US Economic data was largely unnoticed, the PPI Final Demand came at 4.6% vs 5.4% expected and retail sales fell more than feared 0.4% vs 0.3% expected.

Rates and risk sentiment should drive markets today:

• The ECB Rate decision at 14:15 and the press conference at 14:45 will be in focus, as of now a hike of 25 BPS is more probable with 55% and the 45% are in favor of 50. We recently were at 90% probability of 50 BPD: There will also likely be questions on the stability of the financial system and if the ECB sees any call to action.
• Comments around Credit Suisse will be watched closely
• Rate expectations: the Fed is now seen to hike by only 25bps with a probability of 70% and the Swiss National Bank only  25BPS as well with 73% next week Wednesday and Thursday.

Keep your risk management in place in trading and be safe.

If you require any assistance contact us – we are here for you.

Thursday 16 March

• US Housing starts & building permits (Feb)
• US Initial jobless claims
• Australian employment data – jobless rate (Feb)
• ECB policy rate decision
• Japan exports (Feb)
• Japan Machinery orders (Jan)

Friday 17 March

• US Industrial production (Feb)
• US university of Michigan Consumer Sentiment Survey (Feb)
• UK BoE/Ipsos Inflation next 12 months (Feb)
• Japan Tertiary industry activity (Jan)

Earnings on watch this week:

• Thursday: FedEx, Dollar General, Enel, Li Ning

Friday: Vonovia, Longfor, CMOC Group