Quarterly Outlook
Fixed Income Outlook: Bonds Hit Reset. A New Equilibrium Emerges
Althea Spinozzi
Head of Fixed Income Strategy
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Morning Brew August 10 2022
Erik Schafhauser
Senior Relationship Manager
Summary: CPI key
Good Morning,
All eyes are on the CPIs today, the Chinese number came a little lower than expected at 2.7% vs 2.9% expected and the German in line with expectations.
At 14:30 the US CPI will be released and will provide insight on the future rate path in the US: Currently a 75 bps hike remails priced in at 68%. The Consumer Price Index is seen to have risen 0.2% last month after advancing 1.3% in June, the annual rate is expected at 6.1% seasonally adjusted.
Tech shares came under pressure as Micron Technology cut it`s outlook, Intel fell more than 2%, AMD 4.5% and Nvidia 4%. The demand for PC and Cell Phones is seen to slow.
The FX Markets are fairly quiet going in to the CPI, Gold and Silver give up a little ground after the strong rise to trade at1790 and 20.38 . EURUSD 1.0213 and GBPUSD at 1.2070. USDJPY holds near the 135 and Implied vol is at 9%. For the 1 month atm EURUSD.
Rates edge minutely higher to 2.80 for the 10 and 3.27 for the 2 year.
Elon Musk sold app. 7 billion worth of Tesla to finance a potential Twitter deal
Peter Garnry wrote a very good piece on risk management and the advantage of adding an ETF to the portfolio
Besides the CPI, Taiwan, Ukraine and US Politics remain important items but no key developments are expected today.
- Wednesday: Commonwealth Bank of Australia, Vestas Wind Systems, Genmab, E.ON, Honda Motor, Prudential, Aviva, Walt Disney, Coupang, Illumina
- Thursday: KBC Group, Brookfield Asset Management, Orsted, Novozymes, Siemens, Hapag-Lloyd, RWE, China Mobile, Antofagasta, Zurich Insurance Group, NIO, Rivian Automotive
- Friday: Flutter Entertainment, Baidu
Expiries
- Physically Settled Futures:
- Low Sulphur Gasoil (FPQ2) will expire 10th Aug at 15:00 GMT
- Lean Hogs (HEQ2) will expire 12th Aug at 17:00 GMT
- Expiring CFDs:
- LEANHOGSAUG22 will expire 10th Aug at 15:00 GMT
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