Senior Relationship Manager
Summary: Market Overly complacent
Good Morning,
Equities continue to grind higher despite hawkish tones from various fed speakers, James Bullard believes the Fed needs to be more aggressive, Mester sees rates at 2.5% by year end, Mary Daly also sees higher rates as necessary. The Dow gained 0.7%, the S&P 500 1.1%, and the Nasdaq closed up 2%
President Zelenskiy is cautiously optimistic on negotiations: "It's very difficult, sometimes confrontational," he said. "But step by step we are moving forward." (Reuters) and further sanctions on Russia and Russian individuals are expected in the week when Joe Biden visits Europe.
The Vix Index is declining and the cost for put options has fallen significantly. The cost of an option that insures a 10% or more drop in the S&P 500 is 30% cheaper than just one week ago so it might be a good opportunity to stock up on protection. A 4050 put until June is trading at 65 per Index. According to Reuters the need for protection has declined as large investors have moved to the sidelines.
The Market seems overly complacent at the moment.
The GER40 is trading just above the resistance mentioned yesterday at 14515.
US 10 Year rose as bonds sold off and hit 2.4% up from 2.20 yesterday, the German rose to 0.5%.
FX in unimpressed and trading calmly, the USD index at 98.50, EURUSD back above 1.10 at 1.1025 and GBPUSD 1.3260. Gold and Silver recede to 1918 and 24.80 USDJPY is 121.
Oil prices turned higher again after U.S. crude stocks fell last week, underlining how tight global supplies amid sanctions.
ZTE Corp completed five years of probation in the United States and shares soar as much as 60% in Hong Kong
The First Tesla was finished in the new Berlin Gigafactory.
The UK CPI was just released 0.3% higher than expected,
At 15:00 CET we are expecting the US New Home Sales and at 16:00 CET the EU Consumer Confidence
Expiries
Physically Settled Futures:
PLJ2 will expire 23rd March at 15:00 GMT.
NGJ2 will expire 28th March at 7:30 GMT.
Expiring CFDs:
NATGASUSAPR22 will expire on 25 March at 15:00 GMT.
GASOLINEUSAPR22 and GOLDAPR22 will expire on 29 March at 15:00 GMT.
Futures can be rolled online via the Futures Spread Trade Ticket. Any open positions will be closed after the mentioned times.
2024: The wasted year
Markets are driven by election optimism, overshadowing growing debt and liquidity concerns. The 2024 elections loom large, but economic fundamentals and debt issues warrant cautious investment.
As US economic slowdown hints at a shift away from exceptionalism, USD faces downside with looming Fed cuts. AUD and NZD set to outperform as their rate cuts lag. JPY gains on carry unwind bets and BOJ pivot.
Amid AI and obesity drug excitement, equities see varied prospects: neutral on overvalued US stocks, negative on Japan due to JPY risks, positive on Europe. European defence stocks gain appeal.
With the economic slowdown, quality assets will gain favour, especially sovereign bonds up to 5 years. Central banks' potential rate cuts in Q2 suggest extending duration, despite policy and inflation concerns.
Commodities poised for rebound. The "Year of the Metal" boosts gold and silver, copper awaits rate cuts. Grains may recover, natural gas stabilises. Gold targets $2,300-$2,500/oz, copper's breakout could signal growth.
Markets are driven by election optimism, overshadowing growing debt and liquidity concerns. The 2024 elections loom large, but economic fundamentals and debt issues warrant cautious investment.
As US economic slowdown hints at a shift away from exceptionalism, USD faces downside with looming Fed cuts. AUD and NZD set to outperform as their rate cuts lag. JPY gains on carry unwind bets and BOJ pivot.
Amid AI and obesity drug excitement, equities see varied prospects: neutral on overvalued US stocks, negative on Japan due to JPY risks, positive on Europe. European defence stocks gain appeal.
With the economic slowdown, quality assets will gain favour, especially sovereign bonds up to 5 years. Central banks' potential rate cuts in Q2 suggest extending duration, despite policy and inflation concerns.
Commodities poised for rebound. The "Year of the Metal" boosts gold and silver, copper awaits rate cuts. Grains may recover, natural gas stabilises. Gold targets $2,300-$2,500/oz, copper's breakout could signal growth.