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
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Morning Brew February 20 2023
Erik Schafhauser
Senior Relationship Manager
Summary: Dovish speakers lead USD and Rates off the peak, Fed Minutes PCE and Geopolitics may move markets.
Good Morning,
Remember the US are celebrating George Washington’s birthday and stocks will remain closed,
Equities were mixed on Friday with more dovish comments from Fed-Speakers and some profit taking in Tech. US farm equipment maker John Deere gained 7.5% while Moderna Inc fell 3.3% after its experimental messenger RNA-based influenza vaccine delivered mixed results in a study. Lithium miners Livent Corp, lbemarle Corp and Piedmont Lithium slumped between 9% and 12% due to concerns about weakness in Chinese demand.
The S&P 500 fell by -0.28%, the Nasdaq dropped -0.58% but he Dow +0.39%.
The USD Index retreated to below 104 again and 2 year yields fell to 4.64 again. EURUSD is near 1.07 and GBPUSD trades at 1.2040. USDJPOY 134.10 and USDCHF 0.9240. Gold and Silver traded at key supports but subsequently bounced off recovery to 1844 and 21.76. Next key support for Gold is at 1828 and $1800 before the 200DMA at 1776 .
Silver delivered an interesting end of day rally and managed to close above the 21 Level, the 200d Moving average and also the weekly 200 and 50 averages.
Low inventories support copper, along with hops of a Chinese demand recovery. We bounced off the 200d MA last week that is at 401.30.
Looking ahead the story remains in US rates and the US growth story to make or break the market, while news that China may support Russia with arms deliveries cause geopolitical worries that have not affected markets so far it seems.
This week there are massive Futures and CFD expiries (below) that may prove significant.
The Fed Minutes will provide insights to the fed deliberations but may not be as important as the last meeting was before the high nonfarm Payroll and high inflation.
More important my be the PCE Data that is the feds favorite inflation indicator on Friday.
Tuesday
Data: International PMI, German ZEW, Canada CPI
Earnings: Wallmart, Coinbase, Chesapeake Energy, Toll Brothers
Wednesday:
Data: DE HICP, CPI, IFO, US Minutes
Earnings: Wix, Garmin, Nvidia, Etsy,
Thursday
Data: Turkey Rate decision, US GDP, Initial Jobless Claims
Earnings: Alibaba, Moderna, wayfair, Nikola, Wish, Beyond Meat
Friday
Data: DE GDP PCE University of Michigan
Expiries
Physically Settled Futures
PAH3 will expire 20 Feb 2023
CCH3 will expire 21 Feb 2023
CTH3 will expire 21 Feb 2023
CLH3 will expire 21 Feb 2023
OJH3 will expire 22 Feb 2023
RCH3 will expire 22 Feb 2023
NGH3 will expire 23 Feb 2023
Expiring CFDs
COCOANYMAR23 will expire 20 Feb 2023
COTTONMAR23 will expire 20 Feb 2023
NATGASUSMAR23 will expire 22 Feb 2023
TAIWAN95FEB23 will expire 23 Feb 2023
10YUSTNOTEMAR23 will expire 24 Feb 2023
30YUSTBONDMAR23 will expire 24 Feb 2023
COPPERUSMAR23 will expire 24 Feb 2023
CORNMAR23 will expire 24 Feb 2023
GASOLINEUSMAR23 will expire 24 Feb 2023
HEATINGOILMAR23 will expire 24 Feb 2023
SILVERMAR23 will expire 24 Feb 2023
SOYBEANMEALMAR23 will expire 24 Feb 2023
SOYBEANOILMAR23 will expire 24 Feb 2023
SOYBEANSMAR23 will expire 24 Feb 2023
SUGARNYMAR23 will expire 24 Feb 2023
WHEATMAR23 will expire 24 Feb 2023
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