Morning Brew February 2 2023

Good Morning, 

Sometimes it is nice to be right. The Fed yesterday did the expected and hiked by 25 basis points. Powell then spoke at the press conference and while many of his statements were fairly hawkish, he also said a “disinflationary” process was underway and this triggered the belief that we were indeed looking at the mentioned “Two and Done”. Where yesterday we were trading a peak rate of 4.9% in May / June, we are now at 4.8% , This was enough to trigger a strong rally across instruments:

10 year Yields fell to 3.42 an the USD Index dropped from 102.59 on Jan 31 to 100.78. EURUSD broke above 1.10 and also above the 50% retracement of the larger downtrend, USDJPY is trading at 128.60 and Gold and Silver rally to 1953 and 24.20. 1960 and 24.50 are significant resistances to keep an eye on.

The US500 as well as the US tech100 gained significantly and both broke above their 50 week moving average having risen 1 and 2% respectively, the US30 hardly blinked. The GER40 is testing recent highs at 15280 and a brake above will open the way to 15750.

AMD gained 13% yesterday while electronic arts fell 9%. Meta shares jumped 19% higher after the bell on announcing a $40 billion increase in its share buyback as well as lifting guidance for Q1.

Deutsche Bank announced an annual profit for the third time in a row now, quarterly profit came at twice the expectation (€1.8 Bio) Sony reports a decline in profits but manages to beat expectations.

Looking ahead, we are waiting for the Bank of England`s rate decision today at 13:00 and the ECB at 14:15 followed Mme Lagarde’s Press conference at 14:45. Both central banks are seen to hike by 0.5% with a probability for the BoE and 91.5% for the ECB.

After the Bell, Amazon, Apple and Alphabet will report earnings

Tomorrow the Nonfarm Payroll will be the key event – expected at 185k. The EU PPI as well as international PMI could also move markets.

Difficult to trade but important is the development around Adani Group in India where Hindenburg Research launched a short selling attack, stating the group was massively overvalued and raising accusations on various malpractices. A planed share sale fell though and  the Group lost 100 bio in value.

Today

Band Of England, ECB Rate decision

Earnings:   Merck, Lilly, Honeywell, Sony, Amazon, Apple, Alphabet, Ford, Qualcomm, Starbucks, Gilead,

Friday

EU PPI International PMI, Nonfarm Payroll

Earnings:  Cigna, CBoe, Sanofi

Expiries

        Physically Settled Futures

LEG3 will expire 03 Feb 2023

WH3 will expire 03 Feb 2023

FPG3 will expire 09 Feb 2023

Expiring CFDs

LIVECATTLEFEB23 will expire 02 Feb 2023

GASOILUKFEB23 will expire 08 Feb 2023