Erik Schafhauser Zürich

Morning Brew February 2 2022

Morning Brew 1 minute to read
Erik
Erik Schafhauser

Senior Relationship Manager

Summary:  Traders are looking for a hawkish ECB, Google strong on results.


Good Morning

Quite a mixed session on US exchanges yesterday, that ended in the green for the indexes, Dow 0.78%, S&P 0.69%, Nasdaq 0.75%. Exon rose 6.5% on strong results and stock of the day was Google, closing up almost 2% and adding another 6% after the results and market close. For Swiss, UBS was rather amazing with an 8% rise

Sony surprises with a 30% rise in operating profit this morning. The GER40 is near the key resistance at 15725.

Fed Speakers Patrick Harker and Raphael Bostic  were on the wires yesterday, saying 4 hikes could be appropriate and that the fed needed to act soon. Harker said he was not convinced a 50 point hike in March was necessary.

The Expectation for a hawkish ECB is in the rise, yields are rising to their highest since 2019 and interest futures imply a 9 basis point hike by July. British Yields also rise. Both central banks will announce their policy rates tomorrow. It will be an interesting day.

EURUSD rises to 1.1270 and GBPUSD 1.3520, the USD Index trades at 96.29. Gold and Silver tested higher yesterday but Gold failed to breach the 1810 and fell back to 1797 and Silver trades 10 cents higher than yesterday after hitting a high of 23.10 yesterday.

Russian President Vladimir Putin accused the West of trying to push Russia into a war..

China, Hong Kong, Singapore, Malaysia continue to be closed for the Chinese New Year celebration.

Our Ole Hansen published a great article on commodity returns, that is key for a all looking to start trading the sector:

Commodity investors need to understand total return

 Commodities continued to build on strong gains in 2021, a year where the sector recorded its best year since 2000. In our recently published Quarterly Outlook we see the prospect of even higher prices in 2022 with another year of tight supply and inflationary pressures supporting commodity returns. The decarbonization of the world will increasingly create so-called greenflation where rising demand and prices of commodities needed to support the process will be met by inelastic supply, partly driven by regulations, such as ESG, prohibiting some investors and banks from supporting mining and drilling activities.

Economic Data:

Wednesday: EZ HICP, ADP Employment

Thursday: International PMIs, EU PPI , UK rate decision, EU Rate decision, US Employment data and factory orders

Friday: Germany Industrial Orders, EU retail sales, US Nonfarm Payroll

Earnings:

Wednesday :Alibaba Novo Nordisk Alphabet Sony Mitsubishi T-Mobile Meta QUALCOMM AbbVie Thermo Fisher Novartis AG

Thursday: Roche Ford Amazon.com Eli Lilly Shell  ConocoPhillips , Estee Lauder Cos Inc

Friday:: Bristol-Myers Squibb,  Sano FP

 

Quarterly Outlook

01 /

  • Upending the global order at blinding speed

    Quarterly Outlook

    Upending the global order at blinding speed

    John J. Hardy

    Global Head of Macro Strategy

    We are witnessing a once-in-a-lifetime shredding of the global order. As the new order takes shape, ...
  • Equity outlook: The high cost of global fragmentation for US portfolios

    Quarterly Outlook

    Equity outlook: The high cost of global fragmentation for US portfolios

    Charu Chanana

    Chief Investment Strategist

  • Asset allocation outlook: From Magnificent 7 to Magnificent 2,645—diversification matters, now more than ever

    Quarterly Outlook

    Asset allocation outlook: From Magnificent 7 to Magnificent 2,645—diversification matters, now more than ever

    Jacob Falkencrone

    Global Head of Investment Strategy

  • Commodity Outlook: Commodities rally despite global uncertainty

    Quarterly Outlook

    Commodity Outlook: Commodities rally despite global uncertainty

    Ole Hansen

    Head of Commodity Strategy

  • Macro outlook: Trump 2.0: Can the US have its cake and eat it, too?

    Quarterly Outlook

    Macro outlook: Trump 2.0: Can the US have its cake and eat it, too?

    John J. Hardy

    Global Head of Macro Strategy

  • Equity Outlook: The ride just got rougher

    Quarterly Outlook

    Equity Outlook: The ride just got rougher

    Charu Chanana

    Chief Investment Strategist

  • China Outlook: The choice between retaliation or de-escalation

    Quarterly Outlook

    China Outlook: The choice between retaliation or de-escalation

    Charu Chanana

    Chief Investment Strategist

  • Commodity Outlook: A bumpy road ahead calls for diversification

    Quarterly Outlook

    Commodity Outlook: A bumpy road ahead calls for diversification

    Ole Hansen

    Head of Commodity Strategy

  • FX outlook: Tariffs drive USD strength, until...?

    Quarterly Outlook

    FX outlook: Tariffs drive USD strength, until...?

    John J. Hardy

    Global Head of Macro Strategy

  • Fixed Income Outlook: Bonds Hit Reset. A New Equilibrium Emerges

    Quarterly Outlook

    Fixed Income Outlook: Bonds Hit Reset. A New Equilibrium Emerges

    Althea Spinozzi

    Head of Fixed Income Strategy

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