Erik Schafhauser Zürich Erik Schafhauser Zürich Erik Schafhauser Zürich

Morning Brew March 17 2022

Morning Brew 1 minute to read
Erik Schafhauser

Senior Relationship Manager

Summary:  Markets shrug off hawkish Fed - Despite 7 hikes in 2022, equities soar


Good Morning,

The Fed hikes by 25bps for the first time since 2018 and is expecting six more hikes this year. Equities gain strongly nevertheless. The Dow gains 1.5%, the S&P 500 2.2%, and the Nasdaq 3.8%, Banks gain across the board. The GER40 rises to 14500, the Hongkong 50 adds another 5.4% bitcoin rises to above 40k.

EURUSD rises to 1.1030, GBPUSD to 1.3165 and Gold and Silver to 1932 and 25.15.

US 10 Year Yields rose to as much as 2.24 before receding to 2.16. the USD Index fell to 98.3. The implied Volatility of a 1 month ATM Option fell to below 10% to 8.57%. Markets now price in 50 BPS hike by the ECB by year end.

Driver behind the somewhat counterintuitive move were comments by Jerome Powell in the press conference that the economy was strong enough to withstand rate hikes and that he wasn't concerned by the possibility of a recession"

Almost exactly 4 years after the last larger earthquake in Fukushima, that causes the nuclear power plant to be flooded by the Tsunami, the area is hit by a 7.3 quake again killing people.

Today the Bank of England as well as the Central Bank of Turkey will announce rates, both are expected to hike by 25 basis points.

Progress in the negotiations in Ukraine also serve to calm markets, President Zelenskiy said negotiations were becoming more realistic and the Russian Foreign Minister Sergei Lavrov also sounded somewhat optimistic.

The market looks a little complacent to me.

Todays Data:

11:00 EU HICP Final expected at 5.8% YoY

12:00 Turkish Rate decision

13:00 BoE rate decision

13:30 Philly Fed and US Employment data

14:15 Industrial Production

 

 

Expiries
Physically Settled Futures:

CLJ2 will expire 22nd March at 15:00 GMT.

PLJ2 will expire 23rd March at 15:00 GMT.

NGJ2 will expire 28th March at 7:30 GMT.

Expiring CFDs:

OILUSAPR22 will expire 18th March at 15:00 GMT.

PLATINUMAPR22 will expire on 22 March at 15:00 GMT.

NATGASUSAPR22 will expire on 25 March at 15:00 GMT.

GASOLINEUSAPR22 and GOLDAPR22 will expire on 29 March at 15:00 GMT.

Trade Safely`

 

 

Disclaimer

The Saxo Bank Group entities each provide execution-only service and access to Analysis permitting a person to view and/or use content available on or via the website. This content is not intended to and does not change or expand on the execution-only service. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Rules of Engagement and (v) Notices applying to Saxo News & Research and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Bank Group by which access to Saxo News & Research is gained. Such content is therefore provided as no more than information. In particular no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Bank Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Bank Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on Saxo News & Research or as a result of the use of the Saxo News & Research. Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Bank Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. Saxo News & Research does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of our trading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication under relevant laws.

Please read our disclaimers:
Notification on Non-Independent Investment Research (https://www.home.saxo/legal/niird/notification)
Full disclaimer (https://www.home.saxo/legal/disclaimer/saxo-disclaimer)
Full disclaimer (https://www.home.saxo/legal/saxoselect-disclaimer/disclaimer)

Saxo Bank (Schweiz) AG
Beethovenstrasse 33
CH-8002
Zurich
Switzerland

Contact Saxo

Select region

Switzerland
Switzerland

All trading carries risk. Losses can exceed deposits on margin products. You should consider whether you understand how our products work and whether you can afford to take the high risk of losing your money. To help you understand the risks involved we have put together a general Risk Warning series of Key Information Documents (KIDs) highlighting the risks and rewards related to each product. The KIDs can be accessed within the trading platform. Please note that the full prospectus can be obtained free of charge from Saxo Bank (Switzerland) ltd. or the issuer.

This website can be accessed worldwide however the information on the website is related to Saxo Bank (Switzerland) Ltd. All clients will directly engage with Saxo Bank (Switzerland) Ltd. and all client agreements will be entered into with Saxo Bank (Switzerland) Ltd. and thus governed by Swiss Law.

The content of this website represents marketing material and has not been notified or submitted to any supervisory authority.

If you contact Saxo Bank (Switzerland) Ltd. or visit this website, you acknowledge and agree that any data that you transmit to Saxo Bank (Switzerland) Ltd., either through this website, by telephone or by any other means of communication (e.g. e-mail), may be collected or recorded and transferred to other Saxo Bank Group companies or third parties in Switzerland or abroad and may be stored or otherwise processed by them or Saxo Bank (Switzerland) Ltd. You release Saxo Bank (Switzerland) Ltd. from its obligations under Swiss banking and securities dealer secrecies and, to the extent permitted by law, data protection laws as well as other laws and obligations to protect privacy. Saxo Bank (Switzerland) Ltd. has implemented appropriate technical and organizational measures to protect data from unauthorized processing and disclosure and applies appropriate safeguards to guarantee adequate protection of such data.

Apple, iPad and iPhone are trademarks of Apple Inc., registered in the U.S. and other countries. App Store is a service mark of Apple Inc.