Morning Brew November 1 2022
Senior Relationship Manager
Summary: EU Inflation as a Halloween gift - Dow has the best month since 1976
Welcome to November
Stocks lost a little steam yesterday after a strong month with the Dow Jones having the best month since 1976. The Index gained 14%, the S&P 500 8% and the Nasdaq gained 4% due to the pressure on mega caps.
This morning risk sentiment is strong with the USD a little weaker and equities gaining. Gold and Silver rise to 1643 and 19.55, the EURUSD 0.9925 and GBPUSD to 1.1535 and the USD Index hovers near 111. China's yuan fell to a near 15-year low against the dollar
The positive sentiment is likely driven by a higher than feared Chinese PMI, coming at 49.2 vs 49 expected and the fact that the Australian Central Bank stuck to a hike of 25 Basis points rather than 50.
European Inflation was reported even higher than feared yesterday, causing fears of hawkish central Banks.
Eyes remain on the FOMC tomorrow where the expectation remains for a hike of 75 Basis Points, the probability remains above 95% and the ten year yield remains near 4% - hopefully the US PMIs (14:45 and 15:00) will not change the mood.
Japan spent a record $42.8 billion on currency intervention in October
Sony`s profit rose 8%, Toyotas fell by app 25%
Saudi Aramco said on Tuesday its third-quarter net income rose 39%
The Chinese real estate Market remains under pressure with prices falling again and sales declining app 20% yoy.
Tuesday: AU Rate, CN PMI, US PMI,
Wednesday: EU PMI, DE unemployment, FOMC Rate decision
Thursday: UK PMI and Rate decision, EU Unemployment, US PMI,
Friday; EU PMI, US Nonfarm Payrolls
Tuesday: AMD, Pfizer, BP
Wednesday: Novo Nordisk, GSK, Booking, Qualcom, CVS,
Thursday: ConocoPhillips Cigna Corp, Amgen, Paypal, Starbucks, EOG, DBS,
Physically Settled Futures:
Random Length Lumber - Nov 2022 (LBX2) will expire 1st Nov 15:00 GMT
Latest Market Insights
Q4 Outlook 2022: Winter is coming
- Winter is coming to the financial markets as central banks are tightening their grip. How spring will look is still a question.
European energy crisis: it will get worse before it gets betterThe winter in Europe will be tough, but whether the result is political chaos or sustainable, innovative solutions is still undecided.
A difficult and volatile quarter awaitsAs the year draws to an end, commodities continue to be at centre stage of the world with growth pockets political uncertainty.
The bright side: crises drive innovationThe positive spin on crises is that they come with solutions. It is worrisome that deglobalisation may be a response to this crisis.
Green transformation in China: renewable energy and beyondGoing green, China needs to span numerous energy sources to ensure stability, as every source comes with a challenge.
Asia: Intermittent solutions, but a faster renewable adoption curveAsian energy supply is being squeezed. This and the adoption of renewables may change the investment sentiment in the region.
FX: A Fed thaw needed to deliver a sustained USD turn lowerThe US Dollar can keep momentum when the Federal Reserve continues to tighten, leaving the rest to play to their drum.
Autumn can become ugly for equities and bond holders. Comfort for Dollar longsTechnical analysis suggests that equities could face a tough Q4 as could fixed income. US Dollar positions could provide some upside.
The next stock market sector to watch, with stocks going nuclearAs the world scrambles to find affordable, sustainable energy, nuclear is getting attention from politicians and investors alike.
The crypto space is getting cold when the hype disappearsCryptocurrencies face a winter of their own as retail investors and governments are asking tough questions.