Morning Brew November 21 2022
Senior Relationship Manager
Summary: Thin trading expected due to Thanksgiving and little key releases
This week is fairly quiet in terms of economic data – especially out ot the us where the thanksgiving holiday on Thursday will cause many traders to be off.
Focus will likely be on the turnover in retail as this week is traditionally one of the busiest, with black Friday the key event.
After equities traded minutely higher on Friday, ne corona outbreaks in China weigh on risk this morning. The USD gains to 107.50, EURUSD falls to 1.0260, GBPUSD 1.1830 and USDJPY rises to 140.70.
Oil, Gold and Silver trade lower at 79.60, 1746 and 20.80, Indexes are trading lower by app 0.3% and Bitcoin is meandering the 16000.
Several districts in China have reported new corona outbreaks and new lockdowns are being imposed. While the moves are still fairly small this is a development the could turn significant.
With little key economic news on the agenda and likely thin trading, anything that boosts or diminishes confidence can push markets either way quickly. Next week the year end phase will start in earnest with the Non-farm payroll on December 2nd providing key input for the last rate decision by the fed on December 14th.
Tuesday: EU Consumer Confidence
Wednesday European and US PMIs
Thursday: DE IFO, Swedish and Turkish rate decisions
Friday: DE GDP
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.