Macro: Sandcastle economics
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Morning Brew January 5 2023
Erik Schafhauser
Senior Relationship Manager
Good Morning,
There was no too significant surprise in the Fed minutes, while the focus is inflation and an unwarranted easing in financial conditions too early, the expected terminal rate rose only slightly to 4.99 in June.
Oil fell by 5% yesterday on continuing worries on demand and large supply, also data showed an increase of output in December. Gas Prices in Europe continue to decline on LNG imports and warm weather.
US indexed higher for the first time in 23 with the Dow up 0.4% the S&P 0.75 and the Nasdaq 0.7%. Apple gained 1% and Tesla 5% after the recent declines, Microsoft lost 4% on a downgrade by Microsoft.
Amazon will lay off more than 18,000 staff as part of a workforce reduction, Exxon Mobil is expecting a an operational profit of about $15.4 billion in its fourth quarter, implying a record year 2022.
US 10 year rates rise to 3.71 while EU 10 year Rates fall to below 2.3%.
EURUSD rises to above 1.06 again, GBPUSD 1.2040, USDJPY 132.50. Gold and Silver followed Oil lower, Gold is at 1853 and Silver 23.70.
Hopes that China is fully reopening caused interesting market moves, the Australian dollar gained 1.6% against the dollar following on news that China is considering to import Australian coal, again, JD:com rose almost 15%. Asian shares post 4 month highs.
U.S. President Joe Biden raised concerns about China's handling of its COVID-19 outbreak hours after the World Health Organization said it was under-reporting virus deaths.
There has been no progress in the election of the Speaker of the House in the US aver McCarthy failed the second day.
Key Data today is German Trade Data at 8:00, UK PMI at 10:30, EU PPI at 11:00 the regular US labor market data at 14:30 followed by the PMI at 15:45.
Tomorrow the first nonfarm Payroll of the year will be released, expected at 200k.
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