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 June 13 2022
Erik Schafhauser
Senior Relationship Manager
Good Morning,
After the Year-on-year, CPI rose 8.6%, highest since 1981 and following an 8.3% jump in May, equities fell massively and continue their decline after the weekend. The Dow fell 2.7% on Friday and the future is now 1.2% loser, S&P 500 down 2.9% Friday and giving up 1.8% now, Nasdaq down 3.5% Friday and 2% this morning. . If the S&500 closes below 3810 much lower levels are likely – 3500. The GER40 fell to 13480 and seems to target 13380/13270
10 year US Yields rose to 3.16 The USD Index rose to 104.50, GBPUSD fell to 1.2250 and EURUSD to 1.0480 Gold and Silver are holing up quite well against rates and strong USD at 1865 and 21.70
The Volatility of a 1 Month ATM EURUSD option rises by 8% to 9.5%
Crypto came under pressure again with Bitcoin falling to 25k and ETH to 1330. Crypto Lending Firm Celsius halted all withdrawals and transfers, citing extreme market conditions as the cause.
The Week will be dominated by central banks:
Wednesday: US FOMC with a 50 BPS hike expected
Thursday: Swiss National Bank, no change expected
Thursday: Bank of England, hike of 25BPS expected.
Friday: Bank of Japan, no change expected,
Not only the rate decisions but any comments about future decisions will be eyed keenly and it given the reactions we are seeing, we should see large swings on any information regarding inflation, rates or supply chain disruptions.
The UK GDP disappointed this morning, actually falling by 0.3% and causing worries about overall growth.
The Japanese government sated to be worried about the rapid decline of the Yes`s value and that it was ready to act. The Yen fell to 135 against the USD.
China is announcing measures against COVID again while South Korean Truckers remain on strike making further supply chain issues more likely-
Tomorrow at 8 we are expecting the German CPI, at 11 the German ZEW and at 14:30 the US PPI, Wednesday at 11 the EU Industrial production and US Retail Sales at 14:30
Thursday: Australian GDP and Employment data over night and US Labor market data
Friday EU CPI and US Industrial production
Friday is also quadruple witching Friday
Fasten your seatbelts for a key week
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