Summary:  Today we look at the liquidity pressures keeping risk sentiment in the dumps as long US treasury yields and the US dollar continue to rise. US equities are perched at the lows for the cycle once again and we wonder where any sustained relief will come from until the Fed eventually has to exercise its put, but unable to do so given its primary focus on inflation. We also look at forward return potential now that global equities have come down from extremes, commodity positioning and sentiment on China's Covid lockdown impacts, earnings ahead and more. Today's pod features Peter Garnry on equities, Ole Hansen on commodities and John J. Hardy hosting and on FX.

Listen to today’s podcast and have a look at today’s slide deck. Follow Saxo Market Call on your favorite podcast app:           If you are not able to find the podcast on your favourite podcast app when searching for Saxo Market Call, please drop us an email at and

Considering Portfolios In Times Of, Among Others, Inflation...

Thinking Of Portfolios In Times Of, Among Others, Inflation...

Saxo Bank Saxo Bank 08.02.2022 13:38
Summary:  Inflation is surging and as an investor it is important to prepare your portfolio. And it is even more important this time, as it may not be as straight forward as the books would lead you to believe. You need to be aware of inflation as an investor. But it does not need to be a scary thing. In fact, inflation is an important factor in the way the world’s economies are built – and without it, we would be in a much worse situation. Apart from that, inflation can also provide investment opportunities. So, if you, like we do, believe that inflation is here to stay and will keep pushing prices upwards, it could be potentially be relevant for you to review your portfolio and make sure it is positioned towards it. Time to diversify your portfolio? There is one important paradox that is important to deal with, when looking at the current development within inflation and your portfolio. Usually, inflation would favour equity markets, but right now it is more important to look at how the central banks will get inflation under control, rather than looking at the wild running inflation itself. “We have long believed that the current inflation is more structural than temporary, which is contrary to especially the American Fed. This also means that we believe there is a much larger need for tightening the financial conditions than legislators believe. Such tightening will hurt companies across the globe and thus we expect the equity markets to suffer,” says Economist, Christopher Dembik. On top of that, the green transformation makes it harder for the central banks to tighten fiscal policy, as the former takes priority. “Since late 2020, the Saxo Strategy Team has held the view that the real economy is far too small for the financial and economic agendas of governments, central banks and the green transformation. This prompted our call for higher inflation throughout 2021, which crystallised with the inflation spike in the second half of 2021, capped by a 7 percent US December CPI print,” Chief Investment Officer, Steen Jakobsen said in our Q1 2022 Quarterly Outlook. This means, according to Dembik that we should expect the opposite of a positive run for equities: a risk sell-off and the re-introduction of other asset classes’ strength in a portfolio. “With the expectation of fiscal tightening - even though less than we think is necessary – and potentially the first real move back towards historical averages for equities, the concept of a diversified portfolio – not within equities – but across asset classes, could be a key step towards getting the best risk-adjusted return for all investors,” he says. If you want more inspiration from Jakobsen about this topic, go check out his SaxoSession about inflation, where you can also get inspiration to create a portfolio, which is sturdy today as well as tomorrow, from his 100-year portfolio.If you want to read our Head of Equity Strategy, Peter Garnry's, more detalied view on the equity side of inflation, take a look at this article.
AUDUSD Gets Rid Of The Recent Resistance, EURGBP Flows Calmly And USOIL Hovers Around $90

AUDUSD Gets Rid Of The Recent Resistance, EURGBP Flows Calmly And USOIL Hovers Around $90

John Benjamin John Benjamin 10.02.2022 08:47
AUDUSD breaks higher The Australian dollar climbs as traders wager on a hawkish shift from the Reserve Bank of Australia. On the daily chart, a break above the 30-day moving average suggests improved sentiment in the short term. The pair extended its gains after it broke the supply area around 0.7170. As sellers scramble to cover their bets, driving up bids, the rally is heading to the next resistance at 0.7210. The RSI’s overbought situation may cause a temporary pullback with 0.7110 as the first support. EURGBP seeks support The euro consolidates gains amid mixed messages from the ECB. The pair found support at February 2020’s low at 0.8290, and a bullish MA cross on the daily chart suggests a potential turnaround. A break above the daily resistance at 0.8405 has put the single currency back on track. An overbought RSI led momentum traders to take profit. The current pullback is testing the 38.2% Fibonacci retracement level (0.8405) which used to be a resistance. 0.8475 is the main hurdle for the reversal to gain traction. USOIL tests support WTI crude bounces higher after the EIA reported a sharp drop in US inventories. Price action is looking to consolidate its gains above the psychological level of 90.00. Sentiment remains upbeat though the bulls need to take a breather after the latest vertical ascent. 88.00 on the 20-day moving average is the immediate support. An oversold RSI may attract buying interest. A deeper retracement would test 85.00. A recovery above 92.30 could trigger momentum buying once again and resume the rally towards 95.00.
US 30 Is On A Slightly Low Level, Which Way Will GBPJPY Choose?

US 30 Is On A Slightly Low Level, Which Way Will GBPJPY Choose?

John Benjamin John Benjamin 14.02.2022 08:48
USDCHF to test resistance The US dollar rises as traders seek safe haven amid tensions in Ukraine. The pair is grinding up along a rising trendline from support at 0.9180. A series of higher lows suggests strong buying interest. A break above the intermediate resistance at 0.9275 may boost buyers’ confidence further. 0.9310 is the next hurdle and its breach would bring the greenback to the double top (0.9370) on the daily chart. On the downside, the trendline is the closest support, and then 0.9180 is a critical level to keep the short-term rally intact. GBPJPY tests demand zone The pound may find support from Britain’s upbeat GDP in Q4. A break above January’s high at 157.70 suggests that the bulls have reclaimed control of price action. The next challenging task is to push above last October’s peak at 158.20. This would resume the uptrend in the medium term. In the meantime, a combination of profit-taking and fresh selling is driving the price towards 155.20. Sentiment would remain steady as long as the sterling met bidders in this demand area. US 30 seeks support The Dow Jones 30 struggled as white-hot US inflation fanned fears of aggressive rate hikes. Nonetheless, a break above the 30-day moving average on the daily chart indicates improved market sentiment. An overbought RSI prompted momentum traders to exit. A fall below 34820 would suggest lingering hesitation among market participants and shake out weak hands. The bulls may see a pullback towards 34500 as a buying opportunity. The rebound may only resume if the price lifts offers around 35400.
Bullish momentum remains strong

Bullish momentum remains strong

Florian Grummes Florian Grummes 20.02.2022 17:36
Even at the last important low (US$$1,750) on December 15th, 2021, the sentiment was still awful as the sector had become the most hated asset class. Now fast-forward, gold has been successfully breaking out of its multi month triangle and keeps sprinting higher. The bulls currently are bending the daily and weekly Bollinger Bands to the upside, and seasonality is still supportive.Gold in US-Dollar, weekly chart as of February 20th, 2022.Gold in US-Dollar, weekly chart as of February 20th, 2022.Looking at the weekly chart, it appears that gold not only broke out of a triangle consolidation pattern, but also out of a large inverse head and shoulder pattern. It’s not a textbook head and shoulder, but worthwhile noting. A measured move projection could theoretically take gold towards US$2,125! However, the monthly Bollinger Band, sitting at around US$ 1,975, might be a much more realistic target for the ongoing move. As you might remember, the zone between US$1,950 to US$1,975 is very strong resistance. We would not rule out a short-lived overshoot towards US$,2000, though.Overall, the weekly chart is not yet overbought and looks bullish. Hence, the rally has very good chances to continue for a few more weeks.Gold in US-Dollar, daily chart as of February 20th, 2022.Gold in US-Dollar, daily chart as of February 20th, 2022.As expected, the breakout above US$1,840 to US$1,850 has unleashed enough energy to quickly push gold prices towards the round psychological number of US$1,900. Fortunately, the daily stochastic has transformed its overboughtness into the rare “embedded status”, where both signal lines are sitting above 80 for more than three days in a row. Hence, the uptrend is locked-in and shorting this market would be fighting the uptrend.Of course, given the uncertain and complex geopolitical situation, events can and likely will strongly influence gold over the coming days and weeks. Speaking from a technical point of you, any pullback towards the breakout zone around US$1,845 would be a buying opportunity. However, prices below US$1,875 would already be a surprise in the short-term. On the contrary, it’s much more likely that gold will continue its run to at least US$1,930 over the coming days.In summary, the daily chart is bullish. Especially the bullish embedded stochastic oscillator likely will not allow any larger pullback, but rather a consolidation around US$1,900. Watch those two signal lines. Only if one of them would be dropping below 80on a daily close, the bull run might be over!GDX (VanEck Gold Miners ETF) in US-Dollar, daily chart as of February 20th, 2022.GDX, daily chart as of February 20th, 2022.Gold & gold related mining stocks often stabilize your portfolio during uncertain times and do act as a hedge. While the stock market continued its dive due to the crisis in Ukraine and the potential interest rate turnaround in the US, the GDX VanEck Gold Miners ETF is up more than 21.5% since its low in mid of December. Over the last two weeks, the leading gold mining stocks recorded some of their best days in the last 12 months. Last week, Barrick Gold ($GOLD) jumped up more than 7% due to good earnings, a dividend increase, and a new share repurchase program. Some smaller gold stocks like Sabina Gold & Silver ($SGSVF) went up even more (+15% Friday, 11th).Now that gold is on the rise, it’s time for the beaten down and undervalued mining stocks to catch up. Usually, it starts with the big senior produces like Barrick Gold, Agnico Eagle Mines ($AEM) and Newmont Corporation ($NEM), then the juniors like for example Victoria Gold Corp. ($VITFF) join and finally, the explorer and developers literally explode higher.However, the GDX has nearly reached its downtrend line as well as the 38.2% retracement of the whole corrective wave since August 2020. Hence, the big miners are running into string resistance and might need to consolidate soon.At the same time, note, that silver has been lagging. Silver always lags most of the time, but in the final stage of sector wide rally it suddenly passes all the other metals and shots up nearly vertically. That also typically is the sign that the rally in the sector is coming to an end. Obviously, we have not yet seen any strong silver days. Therefore, silver actually confirms that the sector has more room and time to run higher!Conclusion: Bullish momentum remains strongOverall, gold continues to look promising here as the bullish momentum remains strong. Hence, Gold is probably on the way towards US$1,950 and US$1,975, with a slight chance for an overshot to US$2,000. But of course, given the rather overbought daily chart, the risk/reward is not that good anymore. Silver and many of the smaller mining stocks, however, might still offer a chance to play the ongoing rally over the next few weeks. Once gold tops out in spring, expect a big pullback. Maybe even back towards the higher trending 200-day moving average (currently at US$1,808) at some point in midsummer. But that is all somewhere in the future. For now, the bullish momentum remains strong.Feel free to join us in our free Telegram channel for daily real time data and a great community. If you like to get regular updates on our gold model, precious metals and cryptocurrencies you can also subscribe to our free newsletter.Disclosure: Midas Touch Consulting and members of our team are invested in Reyna Gold Corp. These statements are intended to disclose any conflict of interest. They should not be misconstrued as a recommendation to purchase any share. This article and the content are for informational purposes only and do not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision. The views, thoughts and opinions expressed here are the author’s alone. They do not necessarily reflect or represent the views and opinions of Midas Touch Consulting.By Florian Grummes|February 20th, 2022|Tags: $GDXJ, Barrick Gold, GDX, Gold, Gold Analysis, Gold bullish, gold chartbook, gold fundamentals, Newmont Corporation, precious metals, Reyna Gold, Sabina Gold & Silver, Silver, silver bull, US-Dollar, Victoria Gold|0 CommentsAbout the Author: Florian GrummesFlorian Grummes is an independent financial analyst, advisor, consultant, trader & investor as well as an international speaker with more than 20 years of experience in financial markets. He is specialized in precious metals, cryptocurrencies and technical analysis. He is publishing weekly gold, silver & cryptocurrency analysis for his numerous international readers. He is also running a large telegram Channel and a Crypto Signal Service. Florian is well known for combining technical, fundamental and sentiment analysis into one accurate conclusion about the markets. Since April 2019 he is chief editor of the cashkurs-gold newsletter focusing on gold and silver mining stocks. Besides all that, Florian is a music producer and composer. Since more than 25 years he has been professionally creating, writing & producing more than 300 songs. He is also running his own record label Cryon Music & Art Productions. His artist name is Florzinho.
Crypto Charts - BTC Monthly, Weekly, Daily Chart

Crypto Charts - BTC Monthly, Weekly, Daily Chart

Korbinian Koller Korbinian Koller 22.02.2022 09:33
Bitcoin, best in play   The Covid environment brought an additional variant risk factor to the table, especially when it comes to investor psychology. Our last weekly chart book publication made a case for positioning one’s risk hedge plays this year when equity markets most likely trade in a volatile sideways range. We also spoke of a proper wealth preservation strategy, holding both bitcoin and gold within a hedged risk reduction approach for your monies. With our primary focus on risk, the next question is allocation size between bitcoin and gold. As mentioned in the intro, it feels intuitively natural to have significant exposure to the gold side from a cycle history. Yet, insurance seems essential at this time, and as such, we tend to be a bit more aggressive towards bitcoin allocations. Bitcoin, daily chart, not just yet: Bitcoin, daily chart as of February 22nd, 2022. The daily chart reflects the common notion of bitcoin trading alongside PMI numbers and the market as a whole. With the recent break of the modest bounce from the US$33,500 level up leg (yellow up-channel), no immediate low-risk entries for longer-term exposure seems in play.   Bitcoin, weekly chart, great setup, bitcoin, best in play: Bitcoin, weekly chart as of February 22nd, 2022. Nevertheless, we find now zooming out to the weekly time frame a quite interesting entry zone (white box) between the levels US$30,000 to US$34,000. We identified by stacking multiple edges that an entry near US$31,800 would provide the most low-risk entry profile. However, it will depend on how prices will arrive at these levels. As such, we encourage you to check back in our free Telegram channel.  There we post-entries, and exits for educational purposes in real-time. Bitcoin, monthly chart, amazing potential: Bitcoin, monthly chart as of February 22nd, 2022. Where matters become more transparent, and our headlines supported, is at a view of the monthly chart. The first leg up was nothing short of a 1,600% advancement. Now we have been trading for a year in a bullish up sloping sideways channel. With a possible entry at the lows of this channel, a long-term investment provides for a stellar risk/reward-ratio. The second legs are typically longer than the first legs! But that is not all; bitcoin has a higher probability of four-leg moves versus three-leg moves. Consequently, this trade could turn out to be highly profitable after some time. One aspect of risk is the relationship between the size of a potential down move of price and the size of a likely up move. We find bitcoins’ upward potential much more significant than gold for its fundamental characteristics and stellar outperforming history percentagewise. Bitcoin, best in play: Summing it up, bitcoin might not be at its lowest retracement levels yet. Still, its powerful potential in risk/reward-ratio and as an overall risk hedge makes it best in play. We share a low-risk cost averaging in strategy in our free Telegram channel. We find that allocation of funds should be more dominant towards bitcoin. In addition, holding some cash as much as money is deflating can still be a good strategy. Cash is king to purchase desired goods and vehicles, especially when those are even more depressed.    Feel free to join us in our free Telegram channel for daily real time data and a great community. If you like to get regular updates on precious metals and cryptocurrencies, you can also subscribe to our free newsletter. Disclosure: This article and the content are for informational purposes only and do not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision. The views, thoughts and opinions expressed here are the author’s alone. They do not necessarily reflect or represent the views and opinions of Midas Touch Consulting. By Korbinian Koller|February 22nd, 2022|Tags: Bitcoin, Bitcoin bounce, bitcoin consolidation, Bitcoin correction, crypto analysis, crypto chartbook, DeFi, Gold, Gold bullish, low risk, NASDAQ, quad exit, S&P 500, technical analysis, trading education|0 Comments
Intraday Market Analysis – USD Consolidates Gains - 09.03.2022

Intraday Market Analysis – USD Consolidates Gains - 09.03.2022

John Benjamin John Benjamin 09.03.2022 08:47
USDJPY breaks higherThe Japanese yen softened after weaker-than-expected GDP in Q4. Despite choppiness in recent price action, confidence in the greenback remains high.A failed attempt at the supply zone (115.80) suggests a lack of momentum, but a swift bounce off 114.65 reveals strong enough buying interest.A bullish breakout would lead to the double top at 116.35. Its breach could end the two-month-long consolidation and trigger an extended rally towards January 2017’s highs around 118.00. 115.40 is fresh support.AUDUSD seeks supportThe Australian dollar stalls as commodity prices consolidate. The rally above 0.7310, a major supply area, has weakened selling pressure and put the pair on a bullish reversal course.The Aussie’s parabolic ascent and an overbought RSI prompted short-term buyers to take profit. As the RSI swings back into the oversold zone, the bulls may see the current fallback as an opportunity to stake in.0.7380 is a fresh resistance and 0.7250 is the immediate support. Further below 0.7170 is a critical level to keep the rebound valid.UK 100 sees limited bounceThe FTSE 100 struggles as the UK plans to ban Russian energy imports.On the daily chart, a break below the demand zone (6850) wiped out 11-months worth of gains and signaled a strong bearish bias. The RSI’s oversold situation may cause a temporary rebound, but a bearish MA cross could attract more selling interest.The liquidation is yet to end as medium-term buyers scramble for the exit. 7200 is a fresh resistance and 7450 is a major supply zone. A drop below 6800 may lead to 6500.
🔥 SHIBA Volatile Move Ahead: Triangle Analysis

Can (SHIB) Shiba Inu Price Go For A Rocket Launch?

FXStreet News FXStreet News 21.03.2022 16:05
Shiba Inu price is hovering above the $0.0000223 support level, eyeing a 40% upswing. A quick liquidity run below $0.0000202 is likely before triggering the move to $0.0000283. A daily candlestick close below $0.0000158 will invalidate the bullish thesis for SHIB. Shiba Inu price action seems to be repeating itself after a recent breakout from its downtrend. The rebound is pausing and might go for a liquidity run below a vital support level before a full-blown rally kicks off. Shiba Inu price prepares for a new leg-up Shiba Inu price crashed 77% from its all-time high before setting up a swing low around $0.0000202. The downswing, however, was breached on February 3, as price undertook a u-turn and made a 75% ascent. The new uptrend failed to sustain, however, leading to another downswing. After a brief period of consolidation, SHIB breached through its mini downtrend and is currently establishing a support level around $0.0000223 before triggering an explosive rally higher. However, investors can expect Shiba Inu price to slide lower first in search of liquidity below the $0.0000202 barrier. Such a move will signal the start of an uptrend and interested investors can enter long at $0.0000202. The resulting momentum will likely catapult SHIB to retest the immediate hurdle at $0.0000283. This move would constitute a 40% gain and is where market participants can book profits. SHIB/USDT 1-day chart Even if Shiba Inu price breaches the $0.0000202 barrier, the bulls will have another chance to regroup and attempt a run-up into the nine-hour demand zone, ranging from $0.0000158 to $0.0000193. A daily candlestick close below $0.0000193, however, will produce a lower low and invalidate the bullish thesis. In this scenario, Shiba Inu price could crash 15% and retest the $0.0000135 support level.
Crude Oil Rebounds, Gold Price Struggles | Oanda

Nasdaq 100, S&P 500, Bitcoin, Crude Oil And Forex Pairs - Financial Markets Today: Quick Take

Saxo Bank Saxo Bank 28.03.2022 09:50
Macro 2022-03-28 08:38 6 minutes to read Summary:  Markets are a bit nervous to start the week as the steep acceleration higher in US treasury yields continued in the Asian session overnight. Even a casual inspection of prior market regimes shows that a steep back-up in yields at some point will prove dangerous for equity valuations. The 5-year US Treasury yield has vaulted above the 30-year for the first time since 2006. Elsewhere, oil is several dollars lower on hopes for a peace deal in Ukraine.   What is our trading focus? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) - S&P 500 futures closed on Friday just around the 100-day moving average which were breached twice in February without extending the gains so this time will be more critical. S&P 500 futures are rolling over a bit this morning trading around the 4,518 level with the 200-day moving average around 4,471 being the gravitational point should risk-off come into the market. The key risks for US equities are the rapidly rising US interest rates and headlines coming out of the war in Ukraine. Hong Kong’s Hang Seng (HSI.I) and China’s CSI300 (000300.I) - Hang Seng Index and Hang Seng TECH Index (HSTECH.I) recovered early losses from the news of COVID-related partial lockdown of Shanghai. At the time of writing, Hang Seng Index was up 1% and Hang Seng TECH Index rose 2.5%.  Chinese Internet stock lead the charge higher. Meituan surged 14% after reporting better than expected operating margins and smaller than expected loss in 4Q21. Revenue and operating profits from food delivery beat expectations because of higher order volume. Coal mining stocks surged both in Hong Kong and in A-shares. In A-shares, apart from coal miners, financials, real estates, infrastructures did relatively well, while beverage, defense and electrical equipment underperformed. Stoxx 50 (EU50.I) – European equity futures are flat to slightly higher this morning with the Stoxx 50 futures trading around the 3,790 level putting the index futures in a very tight trading range with the 3,765 level being the key level on the downside; on the upside the 3,865 level is the key to watch. Commodity prices are coming down a bit and the preliminary PMI figures for March in Europe were better than expected last week so the information picture is mostly getting better for European equities, but the key risk is still headlines coming out of the war in Ukraine. USDJPY and JPY crosses – USDJPY rose sharply once again overnight on a further rise in US Treasury yields and as the Bank of Japan overnight was out announcing an unlimited bid for 10-year Japanese Government bonds (JGB’s) as it has declared a 0.25% cap on the yields of these bonds under its yield-curve-control (YCC) policy. The bonds traded as high as 0.251% overnight. As long as global yields continue rising and the Bank of Japan pledges unlimited support for its bond market, the pressure on the JPY to weaken continues. It is worth keeping in mind that the end of quarter and end of the Japanese financial year are both approaching this Thursday, which may bring significant portfolio flows, given a brutal quarter for fixed income in Q1. The next major resistance in the USDJPY chart is the near-20 year high from 2015 at 125.86. AUDUSD and AUDJPY – the strong AUD could be trading as the flip-side, or funding side, of the weak Japanese yen in Asia. Australia’s terms of trade have experienced a seismic shift on the dramatic rise in key commodity prices, all of which Japan lacks. Australia is the world’s largest exporter of LNG, for example, which Japan relies on heavily to power its economy. Even before the war in Ukraine broke out, LNG prices soared on reduction of Russian exports. The AUDUSD has traded above 0.7500 since late last week, within striking distance of the major top from last October at 0.7556, while AUDJPY has risen a staggering 15% from its January lows. One can’t help but see AUDJPY as the ultimate high-beta trade that is linked to both commodity prices via AUD and the weakening Japanese yen that is also heavily impacted by the recent rise in global bond yields (see above in USDJPY comments). Bitcoin rallied 5 % on Sunday and is now trading at just below USD 47k, continuing its two-week stealth rally, and Bitcoin is now back at positive returns YTD. Several factors drive the rally such as the positive sentiment in S&P 500, Do Kwon’s (creator of Terra - 9th biggest crypto) plan to buy a large amount of Bitcoin, and the record low Bitcoin balances on crypto exchanges. Crude oil (OILUKMAY22 & OILUSMAY22) trades lower in early trading with Friday’s rebel attacks on Saudi Arabia are being offset by concerns about the short-term demand outlook in China, after the world’s largest importer of crude, said it would lock down half of Shanghai for mass testing as virus flare-ups continue to spread. Russian and Ukraine peace talks resumes this week but with Putin’s government regarded as toxic to many key buyers, self-sanctioning is likely to continue despite a potential solution. On Thursday, OPEC+ meets virtually to set targets for May but given their inability or unwillingness to discuss the elephant in the room, the drop in Russian production, hopes for additional barrels from GCC producers remain slim. Key resistance in Brent at $123/b while a break below $112/b would signal further loss of momentum. Gold (XAUUSD) trades lower as the global bond rout continues to gather momentum with the US ten-year Treasury yield surging past 2.5% in Asia while crude oil trades lower as China’s virus flare-ups worsens and Ukraine appears to be ready to discuss a deal (see below). Having failed to punch through resistance at $1962 last week, the market is once again trading on the defense with focus on ETF flows, the key source of underlying demand during the past month. Support at $1939 and $1930. Copper (COPPERUSMAY22) trades lower for a third day with traders worried about the short-term impact of demand as China, the world’s top consumer, continues to battle virus flare-ups. In addition, Jiangxi Copper Co., China’s top producer of the metal, warned on Friday that prices of the metal may fall this year along with other commodities as countries roll back stimulus and high prices curb demand, while logistics bottlenecks ease. US Treasuries (TLT, IEF). Last week, markets advanced bets on interest rate hikes, pricing 200bps rate hikes by the end of the year. Two-year yields rose to 2.26%, and they could continue to rise to 2.7% if markets begin to price rate hikes for next year. This week the focus is going to be on the PCE Index and the non-farm payrolls on Friday as strong inflationary and jobs data might provide ground to the Federal Reserve to be more aggressive. What is going on? Shift of war focus in Ukraine. Ukraine appears ready to discuss a deal that would take the situation back to the status quo prior to the Russian invasion in February, with Russia still possibly in possession of Crimea as well as a willingness to discuss the status of the Donbas region. Ukrainian president Zelensky downplayed claims from Turkish President Erdogan that Russia and Ukraine are nearing a peace deal. Meanwhile, Ukrainian forces managed to take up the offensive in areas around Kyiv over the weekend, while fighting continues to rage in the besieged port city of Mariupol. Japanese energy firms continue to face threat of potential supply disruptions from Russia. Hiroshima Gas Co. is considering purchasing LNG from Malaysia and other producers, while Osaka Gas Co. plans to bring forward gas procurement from the US or Australia. Efforts are also in place to allow Japanese utility firms to share some of their reserves in the event of a supply disruption of Russian gas. Alternative sources of energy, possibly coal, oil-powered generators or even nuclear power, may also be explored. Concerns emanate not just from supply disruptions but also Putin seeking payment in rubles. Russian ships “going dark” to avoid detection, and potentially sanctions. For the week ending Friday, there were 33 instances of Russian tankers carrying oil and other products turning off systems designed to announce the ships’ location, more than double the level of the last year, according to maritime risk consultancy company Windward. This could allow cargo transfers to obscure the origins of the ships’ cargo. Global container rates continue to fall as the surging cost of everything raises concerns about the outlook for economic growth and with that demand for key commodities. The danger is currently most acute in Europe, where energy bills have soared due to the overreliance on Russian supplies. With natural gas six times higher than a year ago, and electricity costs almost five times more, several heavy energy consuming industries have been forced to reduce production while consumers also hurt by surging cost of food are cutting back on spending. The result can be seen in the cost of shipping containers between Shanghai and Rotterdam. Last week it dropped to $11,190 for a 40 ft box, a nine-month low and down 25% from the October peak. German IFO for March hits lowest level since January 2021. Tuesday’s purchasing manager indexes presented a rather optimistic picture. But as we have mentioned, these indicators have not been very reliable since the start of the outbreak to assess the economic situation. The IFO Index now stands at 90.8 from 98.5 in February. The expectations component, which is certainly more important, saw an even sharper decline than at the start of the pandemic in March 2022, falling to 85.1 from 99.2 the previous month. It seems that German businesses consider the Ukraine war (and all its consequences) will have a much deeper impact on the economy than Covid in the long run. Germany looks at risk of ‘stagflation’, with weak growth and high inflation. Worrying picture for UK consumer confidence. The GfK index falls below -30 in March – this threshold has presaged recession on 4 out of 5 occasions since 1974. This follows a very sharp growth downgrade by the Office for Budget Responsibility for 2022 and 2023. Household future financial confidence falls to a record low. The next 6-12 months will be very challenging for the UK economy, in our view. Shanghai goes in partial lockdown. Shanghai imposed lockdown on the districts east to Huangpu River for 4 days, from today to 1 April 5am and then the districts west to Huangpu River for another 4 days from 1 April at 5am. Tesla’s Shanghai factory is suspended for four days. What are we watching next? Steep rise in US treasury yields set to continue? This, at some point, is a dangerous moment for markets, as a steep back-up in treasury yields preceded every major bear market or market correct in recent decades, most infamously ahead of the 1987 crash, but also into early 2000, 2007 and 2018. The US 10-year Treasury benchmark yield crossed above the 2.50% level for the first time since May of 2019 and has risen nearly 100 basis points year-to-date. The five-year Treasury yield crossed above the 30-year yield for the first time since early 2006, which is likely to be followed by an inversion of the “classic” 2-10 year yield, which often starts the countdown to an economic recession, if with a significant lag. PMI releases in Asia to support reopening trade. China PMIs may be headed south due to the increasing Covid restrictions, but PMIs for the rest of the Asian economies could potentially see improvements. Japan’s Tankan index is expected to see a decline in sentiment due to the highly uncertain geopolitical situation. While North Asian economies may continue to face threats of supply disruptions, India and Southeast Asia PMIs will focus on reopening of the economies. Singapore will ease restrictions substantially from Tuesday, and Singapore Airlines (SIAL) and Sats (SATS) will be a key focus. Casino stocks in Singapore (Genting, 36T) and Malaysia (Genting, GMALY) may also see interest. Earnings Watch. This week’s earnings will concentrate on Chinese earnings with the country’s major banks reporting their Q4 earnings likely showing a further deterioration in credit quality and potential write-downs related to the weakness in the real estate sector. On Wednesday, Ganfeng Lithium, which is the world’s most valuable standalone lithium miner, will reported earnings with expectations of rapid top and bottom-line growth as lithium prices have soared. In terms of US earnings this week, the key focus will be on Micron Technology and Lululemon Atheletica on Wednesday. Monday: Nongfu Spring, CITIC Securities Tuesday: China Construction Bank, Bank of China, BYD, Kuaishou Technology, BOC Hong Kong, Great Wall Motor, Micron Technology, Lululemon Athletica, McCormick Wednesday: Kweichow Moutai, ICBC, Agricultural Bank of China, CNOOC, COSCO, SD Holding, Haier Smart Home, China Vanke, Ganfeng Lithium, China Longyuan Power Group, BOE Technology, Paychex, BioNTech Thursday: PetroChina, China Overseas Land & Investment, China Resources Land, CITIC Ltd., Walgreens Boots Alliance Economic calendar highlights for today (times GMT) 1100 – UK Bank of England Governor Bailey to speak on UK economy 1200 – Canada Nanos Economic Mood Survey 1230 – US Feb. Advance Goods Trade Balance 1340 – UK Chancellor Sunak to testify 1430 – US Mar. Dallas Fed Manufacturing Survey 0030 – Australia Feb. Retail Sales Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app:    
US manufacturing order books and inflation pressures are softening

Markets Going To Shock! What To Expect? Nasdaq, Hang Seng, ASX200, (Australian Dollar To US Dollar) AUDUSD, IBM And Netflix Earnings

Saxo Bank Saxo Bank 19.04.2022 09:14
Equities 2022-04-19 06:00 6 minutes to read Summary:  Global growth to slow says the World Bank, Earnings estimates are weaker and markets brace for more rate hikes. So, Traders turn to commodities again. Oil continues its climb from last week, as global mobility picks up while supply remains cut off from Libya. Broad Asian markets are mixed, yet stocks shine in power generation and Ag. While down under in Australia, their share market inches toward its record all time high, beefed up iron ore, oil and fertilizer stocks. What’s happening in equites that you need to know? The major US indices brace for weakness:   The Nasdaq 100 (USNAS100.I), S&P 500 (US500.I) are on the back foot, trading under their 50-day moving averages. Q1 earnings expectations are the weakest since March 2020, plus results so far are showing profit erosion and rising input costs. Traders are digesting World Bank estimates of slower growth for the year, and bracing for more rate hike hints Thursday. Meanwhile, oil giants remain favored, Occidental (OXY) shares trade up 112% this year, Halliburton (HAL) trades up 82% YTD, Marathon Oil (MRO) up 63% YTD, with oil companies likely to see the strongest earnings growth this year. Read next: (UKOIL) Brent Crude Oil Spikes to Highest Price For April, (NGAS) Natural Gas Hitting Pre-2008 Prices, Cotton Planting Has Begun   Asian markets are mixed: The MSCI Asia Pacific, ex Japan Index (FMASM2) is lower. Singapore’s STI Index (ES3) up 0.7% led by power generation firm Sembcorp (S51), travel stocks such as Genting Singapore (G13) and Singapore Airlines (C6L) as well as agriculture stock Wilmar (F34) and banks UOB (U11) and DBS (D05). Japan’s Nikkei (NI225.I) was trading flat, supported mainly by gains in base metals but dragged by Fast Retailing (9983). MSCI Asia Pacific ex-Japan was lower after US stocks closed in the red overnight and gains in oil prices continued. HK equities retreat.  Hang Seng Index (HSI.I) retreated by 2.8% after coming back from the 4-day long holiday weekend.  Investors found the 25 basis point reserve requirement ratio cut by the People’s Bank of China last Friday disappointing as they had been expecting a more typical 50 bp reduction and a 10 bp cut in the policy Medium-term Lending Facility (MLF) rate as well.  Bilibili (09626) lost 11% on rumor that the company was laying off staff in its live streaming department.  E-commerce names declined on report that the Shanghai Administration for Market Regulation had asked e-commerce companies to a meeting and called on the latter to improve on practices on pricing and delivery of necessities to consumers during the lockdown.  Alibaba (09988) and Meituan (03690) fell 4% to 6%. China Merchant Bank (03968) fell 11% following the abrupt departure of the Chinese bank’s president. CSI300 (000300.I) declined modestly.  Coal miners and fertilizer producers gained. The Australian share market is nearing a record all time high. The (ASX200)is up 0.5% on Tuesday, up for the third day and is now just 0.3% away from hitting its record high. The RBA meeting minutes showed that quicker inflation and a pick up in wages growth will bring forward the timing of the RBA’s first rate hike, however that’s not spooking the ASX, as most sectors trade higher. Gold stocks are leading the market today, like Ramelius (RMU) up 5%, Perseus (PRU) up 4% as investors back the safe haven asset as it traditionally rallies when interest rates rise. While shares in fertizlier and explosive company Incitec Pivot (IPL) are up 4%, to their highest level since 2018 after announcing production will kick off again at its ammonia plant. Elsewhere, oil and coal shares are pushing up while, shares in Australia’s biggest iron ore companies, BHP, FMG and RIO trade higher as iron ore sets 2.5 months highs. Crude oil (OILUKJUN22 & OILUSMAY22) continues to move up, extending its uptrend from last week, WTI oil back at $108, Brent up $113.39 as Libya oilfield outage cut off half a million barrels a day, adding to lack of supply from the war in Ukraine. PLUS, global mobility is rising. For example, Moody's (rating agency) expects travel to be back to normality in 12-18 months. More imminently, China Eastern Airlines resumed flying Boeing 737-800 jets from last weekend following the deadly crash Grain prices surge again. Wheat prices (futures) up 3.6% to $11.28 a bushel, forming another uptrend on lack of supply fears, as colder weather (snow) is tipped to slow planting in Canada. Plus, Wheat planting in US is growing slower than last year. USDA’s springs wheat seedings crop progress report shows 8% of the expected area was planted, compared to 18% last year. Wheat is likely to head higher due to warmer summers, colder winters, meaning soil temps in Canada and US are not ideal, so slimmer supply is ahead, which is supporting wheat prices. Meanwhile Corn prices near a record high. And International Rice Research institute forecasts rice yields may drop 10% in the next season - that is 36mn tons. This will continue to get worse if the war continues.   For you: Forex Rates: British Pound (GBP) Strengthening? Weak (EUR) Euro? GBP, NZD And AUD Supported By Monetary Policy? Iron ore (SCOA) trading above $155 for first time in  2.5 months.  Iron ore likely to continue uptrend and also potentially spike if China cuts interest rate again. This is supporting stocks like BHP, RIO FMG. USDJPY pays no heed to Japanese authorities’ verbal intervention, and rightly so given the monetary policy divergence between the Fed and the BOJ widens the yield differential. USDJPY surged to fresh 20-year highs of 127.55 this morning and the next level to watch is 128 but many are calling for 130 in the days to come. After some warnings from BoJ’s Kuroda yesterday, Japanese Finance Minister Shunichi Suzuki expressed concerns about the sharp drop in the yen today. Bitcoin dropped to lowest level in a months, as risk appetite is dropping like a stone.  Bitcoin fell below key level of support, so watch positions and also in stocks like Block (SQ, SQ2), that make 75% of revenue from BTC What you need to consider World Bank downgrades global growth estimates. The World Bank cut its 2022 outlook to 3.2% from 4.1%, dragged down by Europe and Central Asia amid the Russian invasion of Ukraine. World Bank Chief Economist Carmen Reinhart said there is “exceptional uncertainty” in global markets and further downgrades cannot be ruled out. The Australian dollar is rising back up (AUDUSD) as iron ore and oil prices lift.  The AUDUSD not only pushed higher ahead of RBA Meeting Minutes, but also as the Iron Ore price hit its highest level in 2.5 months, while oil rose to its highest in 4 weeks (these are two of Australia’s largest exports). And finally, the AUD is also being supported higher as Australian tourism is picking up, with the First cruise ship docking in Sydney Harbour since covid ban two years ago. Brace for more hawkish Fed talk this week.  We had James Bullard on the wires yesterday, and he planted the seeds of a 75-basis points rate hike given that the Fed needs to get to neutral rate very soon. Base case for the May meeting is still a 50-basis points rate hike, and a final word on that should be watched from Fed Chair Powell on Thursday as he speaks at the IMF conference. Still, brace for more volatility in yields and further gains in the US dollar as Fed continues to raise the bar of its hawkishness. Trading ideas to consider Asian agriculture stocks are on watch. For reasons mentioned above, it could be worth watching grain stocks like Australia's GrainCorp (GNC), Elders (ELD), or ag chemical company Nufarm (NUF), or Incitec Pivot (IPL), or food processing company Wilmar (WIL) listed in Singapore, or Japan's Yamazaki Baking (2212) may be of interest. Singapore reopening theme in focus into the summer.  Singapore Airlines (C6L) has seen a big jump in passenger volumes this year. Air passenger traffic has reached 31% of pre-covid levels last week up from 18% a month ago. That bodes very well with our reopening theme, and stocks to watch will be Singapore Airlines, SATS (S58) and Genting Singapore (G13). Singapore Airlines and SATS are adapting big technology changes to avoid getting trapped in labour shortages, but also still hiring in a big way in anticipation of a rebound in summer travel. US Earnings to watch. Bank of America (BAC) surged on better-than-expected Q1 results but BNY Mellon (BK) slumped. Focus now on mid-tier financial services earnings like Fifth-third (FITB) and Citizens Financial (CFG). Also on watch will be J&J (JNJ), Netflix (NFLX), Lockheed Martin (LMT), IBM (IBM), Halliburton (HAL) and others. Key issues to consider will be inflation and Fed’s aggressive tightening, but also how supply chains and consumer demand recovery is shaping up. Key APAC economic releases this week: Tue, Apr 19: Japan industrial production Wed, Apr 20: Japan March trade, China 1-year and 5-year loan prime rates Thu, Apr 21: HK March unemployment rate Fri, Apr 22: HK March CPI, RBI meeting minutes   For a global look at markets – tune into our Podcast  
UK retail sales dip as confidence falls to another all-time low

Not Only Earnings, But Also US Tresauries, Strong US Dollar (USD) And China-COVID Circumstances Arouse Investors' Interest Today | Saxo Bank: Podcast: The beatings will continue until morale improves

Saxo Bank Saxo Bank 09.05.2022 10:15
Summary:  Today we look at the liquidity pressures keeping risk sentiment in the dumps as long US treasury yields and the US dollar continue to rise. US equities are perched at the lows for the cycle once again and we wonder where any sustained relief will come from until the Fed eventually has to exercise its put, but unable to do so given its primary focus on inflation. We also look at forward return potential now that global equities have come down from extremes, commodity positioning and sentiment on China's Covid lockdown impacts, earnings ahead and more. Today's pod features Peter Garnry on equities, Ole Hansen on commodities and John J. Hardy hosting and on FX. Listen to today’s podcast and have a look at today’s slide deck. Follow Saxo Market Call on your favorite podcast app:           If you are not able to find the podcast on your favourite podcast app when searching for Saxo Market Call, please drop us an email at and we'll look into it.   Questions and comments, please! We invite you to send any questions and comments you might have for the podcast team. Whether feedback on the show's content, questions about specific topics, or requests for more focus on a given market area in an upcoming podcast, please get in touch at