Morning Brew January 19 2024

Good Morning

Sentiment is improving and equities rise despite higher yields.  The S&P 500 gains 0.9%, Nasdaq +1.4%,  and the Dow 0.5%, Nvidia hit a new record and Apple could gain 3.3%. the GER40 is back to 16600 and the US Tech 100 Nas is above 17000. The Nikkei is boosted by strong semiconductors and the weak Yen, we could see a weekly close above 36k.

The US 10 Year Yield is currently 4.16, and the USD Index 103.44. EURUSD is 1.0880, GBPUSD 1.2680 USDJPY 148.50. Charu wrote about the stance of the Bank of Japan

Oil was strong due to low inventories and worries about tension in the middle east, this also stabilizes Gold and Silver which manage to close above the 2000 and 22.50 respectively. Currently we are trading at 2024 and 22.72.

The US Initial Jobless claims came lower than expected at 187k yesterday showing strength in the US Labor market, part of the Feds Mandate – the PCE Deflator next Friday will give insight to the other part.

We have a slow day in terms of Data ahead of us after the German PPI and the UK Retail Sales were released at 8:00 the German Producer Prices fell more than expected, the UK retail Sales were a massive disappointment at -3.2% monthly vs -0.5% expected. The US Existing Home Sales and the University of Michigan Sentiment need to be a significant surprise to have a real impact.

Next week will bring significant data releases and Earnings with the ECB rate Decision, the US GDP, Durable Goods and most likely most importantly the PCE. Earnings from Logitech, Netflix, Tesla, IBM, Intel, and GE among others will be closely watched.

Koen wrote on how one could use Options to play the relativaly high volatility in EURUSD: What are your (FX) options - Trading the EUR/USD with elevated volatility

Trade Safely-.