Morning Brew September 14 2021
Senior Relationship Manager
Summary: Evergrande under pressure - US CPI as last key event ahead of the FOMC
On Friday we saw the Nasdaq 100 and the Dax at the same level for the first time, then both came under pressure and the Dax was able to recover more strongly as ECB member Isabel Schnabel come on the wires stating that the recent rise in Inflation was no immediate cause for action. The Dax is trading at 15727, the Nasdaq 100 15455, S&P 500 4476 and the Dow 34947 (Based on the Future)
The 10 Year US yield is at 1.3260, the USD Index at 92.62, EURUSD at 1.1810 Bitcoin 45250 and gold and silver at 1792 and 23.60.
US Democrats proposed a reversal Donald Trump's tax cuts, including raising the top tax rate on corporations to 26.5% from the current 21%.
Evergrande, the giant Chinese real estate developer remains under pressure with yields on it`s 2025 bond rising to 54% and shares falling to a 6 year low.
A fake press release led to a surge in the value of litecoin – it was falsely announced that Walmart would start accepting the digital currency.
Today`s key event will be the US CPI at 14:30 CET expected at 5.3% YoY and 0.4% MoM, the core at 4.2%, this is one of the last key events ahead of the Fed decision next week.
This evening Apple will hold one of it`s product events and likely release a now iPhone, Earbuds and a new version of the watch.
Latest Market Insights
Outrageous Predictions 2023: The War Economy
- The constantly growing global need for energy drives the world's richest to huddle up and launch a R&D project in a size the world hasn't seen since the Manhattan Project gave the US the first atomic bomb.
French President Macron resignsThe political stalemate in France and the rise of Marie Le Pen following the 2022 elections corners President Macron, forcing him to give up on politics and resign from his position. At least for now.
Gold rockets to USD 3,000 as central banks fail on inflation mandateAs markets and central banks realise that the idea that inflation is transitory is wrong, and that prices will remain higher for longer, gold is sent through the roof, hitting a price tag of USD 3,000
EU Army forces EU down path to full unionWith continued challenges in the region and a US military that isn't aggressively enacting its former role as global policeman, the European Union agrees to create its own armed forces, bringing the whole region closer.
A country agrees to ban all meat production by 2030In an effort to become one of the global leaders on the path to net-zero emissions, one country decides to not only put a heavy tax on meat, but to ban domestic production entirely.
UK holds UnBrexit referendumFollowing a recession and domestic pressure, the United Kingdom is thrown into political turmoil that will end with a vote to wind back Brexit.
Widespread price controls are introduced to cap official inflationHistory tells us that with the war economy comes rationing and price controls. And this time is no different, as policymakers introduce strict price controls that lead to a range of unintended consequences.
OPEC+ & Chindia walk out of the IMF, agree to trade with new reserve assetSanctions against Russia have caused widespread turmoil due to US Dollar moves in countries across the globe that don't consider the US an ally. To relieve themselves from this, they leave the IMF and create a new reserve asset.
USDJPY fixed to the USD at 200 as Japan overhauls financial systemFollowing the challenges that faced the Japanese Yen in 2022, the Bank of Japan attempts to keep the currency from sliding. Unsuccessful on the long-term, Japan will launch a reset of its entire financial system.
Tax haven ban kills private equityWith the war economy comes an increased focus on national interests and sovereign nations' ability to assert themselves. In that regard, the OECD countries turn their attention on tax havens and pull the big guns out, banning them altogether.