Erik Erik Erik

Morning Brew March 22 2022

Morning Brew 1 minute to read
Erik Schafhauser

Senior Relationship Manager

Summary:  Hawkish Powell and Oil keep Indexes on edge


Good Morning,

A hawkish Powell and worries about a further deterioration in Ukraine / Russia caused a small degree risk off sentiment yesterday. Equities fell slightly but all three indexes less than 1%.

Oil rose on an increased likelihood that there may be sanctions on Russian energy. Russia issued a warning that oil prices of 300 were likely should such sanctions be introduced…

Jerome Powell said the FED must move "expeditiously" and maybe even "more aggressively"  to combat inflation. The probability of a 50 basis point hike for both he May as well as the June meeting rose to above 50% and (60 in May, up 8% from yesterday Morning)

Powell expects inflation to decrease to "near 2%" until 2024 and  that "The economy is very strong and is well-positioned to handle tighter monetary policy. He does not expect a recession this year.

Interestingly, Interest Rate futures already expect a rate cut between December 23 and December 24.

The USD gains against most currencies and the USD Index rises to 98.87, EURUSD is trading at 1.0967, GBPUSD at 1.3122. USDJPY continues to rise, breaching the 120 for the  first time since  2016

The UK May Oil Contract rose 20% off the low last week and is trading at 118.60, Gold rises to 1934 abd Silver to 25.30.

S&P500 tested the 200 Daily SMA and resistance at 4,475 but failed initially. A break above 4,490 is needed  for further upside, 4400 is the key support.

The Dax failed to break above 14475/14500, the key resistance area, key support is 14080.

Please find more technical insights by Kim Cramer Larsson here: https://www.home.saxo/insights/news-and-research/authors/kim-cramer-larsson

Goldman lowers it`s GDP outlook significantly in the re recent weeks, the estimate is now a full percentage point lower at 3.25%.

Alibaba announces es to increase share buybacks.

After the crash of a Boeing 737-800 in China that killed 132 people BA:xnyse lost 3.6%.

As yesterday, there is little on the economic agenda for today, focus will remain on Ukraine and energy  prices in my view, I continue to expect fast markets and would suggest considering optionality when taking speculative positions.

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.