February 1, 2023

Market Update – January 4 – USD & Tesla shine as Treasuries get hammered


Treasuries were hammered to kick off 2022 action as bond bears were in full control, making this the worst start to a year since 2009. Sentiment remains positive, as markets continue to buy into the recovery story. Apple breached the $3 trillion market capitalization mark and TESLA shares rallied +13.5% after block buster deliveries. Sarah Raskin rumoured to be FED Vice Chair for Supervision, suggesting a  tighter regime.

  • USD (USDIndex 96.30) rallied at US open from 95.50 lows. US stocks hit new all-time highs & Yields lept higher as US Treasuries were slaughtered. USOil dipped under $74.00 before recovering & Gold sank to $1800.
  • US Yields 10 yr rocked up to close at 1.62% and trade at 1.63% now   
  • EquitiesUSA500 +30 (+0.26%) at 4766, NASDAQ +1.2%; APPL +2.5%, FB +4.01%, ABNB +3.75%, PFE -4.06%, USA500 FUTS now 4795.     
  • USOil – slipped under $74.00 (rumours of 400k b/d production increase for Feb.) before recovering to $75.60 now ahead of OPEC+ meeting today.
  • Gold – spiked down under $1800 from $1831 on open and trades at $1805 now.
  • Bitcoin slipped again, down to 45,600, trades at 46,500 now.
  • FX marketsEURUSD under 1.1300 at 1.1285, USDJPY moves higher, testing  115.80, Cable back under key 1.3500 at 1.3470.

Overnight – Strong Asian Manu.PMI’s (led by China & JPY) suggest initial Omicron impact on Q4 may be limited. German Retail sales beat significantly (0.6% vs -0.2%)

European Open – The March 10-year Bund future is down -14 ticks, underperforming versus US futures, although they are also in the red. DAX and FTSE 100 futures are posting gains of 0.3% and 1.1% respectively, the latter outperforming in catch up trade, as markets returned from the extended holiday weekend. US futures are up 0.2 to 0.3% and it seems overall sentiment remains positive, as markets continue to buy into the recovery story, which is also underpinning a rise in yields.

Today – German Unemployment, UK Manufacturing PMI Final, US ISM Manufacturing PMI, US JOLTS, JMMC/OPEC+ meetings.

Biggest FX Mover @ (07:30 GMT) AUDJPY (+0.43%) Formed a base at 82.85 yesterday rallied on risk-on mood to 83.50  MAs aligned higher  MACD signal line & histogram higher & above 0 line. RSI 59 & rising,  H1 ATR 0.130 Daily ATR 0.76.

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Stuart Cowell

Head Market Analyst

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