Morning Brew March 8 2022
Senior Relationship Manager
Summary: Nervousness prevails
Volatility remains, coupled with risk off and severe deleveraging. Equities recovered initially yesterday but dopped in the late afternoon on no progress in talks between Ukraine and Russia as well as surging energy prices. US Indexes closed lower the Dow -2.37%, S&P -2.95%, Nasdaq -3.62%, the Dax had closed the opening gap yesterday and rose 600 points to 13100 only to fall back to currently 12560.
EURUSD fell to 10850 and GBPUSD to 1.3080, the USD Index settled above 99 for now.
Gold and silver remain in strong demand with Gold at above 2000 USD at 2010 and Silver at above 26 USD
Rising energy prices basically have the same impact as rate hikes in lowering overall inflation as it drains liquidity and curbs demand. This could incur dovish tones at the ECB and Fed meetings Thursday and next week.
Russia is threatening to halt Natgas deliveries to Europe in retaliation to the sanctions.
There is significant danger of exploding vehicle prices on the sanctions against Russia as a large percentage of various metals is being mined in Russia. In the US, the average car is already 18% more expensive than last year due to the chip shortage, now with
Coinbase announced it blocked 25000 Russian wallets.
As the fallout from the sanctions becomes clearer, expect severe nervousness to prevail in either direction and adjust your risk.
Physically Settled Futures:
FBTPH2, FGBLH2, FGBMH2, FGBSH2, FGBXH2, FOATH2 will expire 7th March at 16:00 GMT.
CH2 will expire 8th March at 10:00 GMT.
GASOILUKMAR22 will expire 8th March at 16:00 GMT.
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.