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U.S Q2 GDP -0.9%, EZ u+0.7%../ SNB...CHF / SPX 4125-50 / UST 10y H&S - 2.70% key / EU CPI 8.9%


  • The Swiss National Bank (SNB) has taken a hit of CHF95.2 billion ($100 billion) for the first half of this year, mainly owing to losses on foreign currency positions AND yesterday said/reiterated it can act at any time if needed (CHF reacted)

  • Eurozone GDP grew by 0.7% in the second quarter on Covid tourism rebound. The acceleration in economic growth is mainly due to reopening effects and masks underlying weakness due to high inflation and manufacturing problems. Expect the economy to contract once the Covid-19 rebound effects are played out (ING) >>> the perma bears might have to nudge H2 2022 forecasts higher ?

  • HONG KONG—Billionaire Jack Ma plans to relinquish control of Ant Group Co., people familiar with the matter said, part of the fintech giant’s effort to move away from affiliate Alibaba Group Holding Ltd. after more than a year of extraordinary pressure from Chinese regulators.

  • US-China Relations: Joe Biden warned Xi Jinping against military action to reunify with Taiwan, but said he wouldn't support the island's formal independence and reiterated the US's "one China" policy. Xi cautioned the US president against interference on the issue. Beijing didn't call the leaders' first conversation since March "constructive," as it had for their four previous conversations, but the two directed aides to plan an in-person meeting.

  • Equity markets were in the mood with lower GDP, pushing USD lower, seems this week ‘bad’ news has been good for markets (usd weaker, yields dramatically lower into month-end… usual price action..), then Investors gained confidence after hearing good news from Apple and Amazon earnings. Sales forecasts for Amazon were higher than expected, and the company is making progress on cost controls. Macs and wearables sold well for Apple, but Macs fell short. Tim Cook expects business to pick up in the coming quarter, and he sees an improvement in China following the Covid lockdowns >>> lots of chatters lately that ‘it’s all priced in’, we referred over the last few weeks to the fact that the market was being forced to short-cover, ‘’’so much negativity that it pushed CTA’s and others to cover’’, there were so many sentiment market indicator that were so negative, that it ‘couldn’t get any worse’’..

 
Markets :

  • NASDAQ up about 10pct in July.. APPL revenue growth slowest since Q3 2020, a lot of this week’s price action is month-end rebalancing/short-covering. SPX is up 420 points from June lows. Bear market rally or something else in the making we leave to you to decide, but 4100 is the first resistance to watch, and then the 4150. Note the 100 day coming in around the 4125 level. One of the problems for bears here is the fact very few are long...or at least not long enough (CHART)

  • USD slightly weaker into month-end, main ‘macro long’ USDJPY got challenged, as expected last few days/week (<135JPY, weak U.S data, lower US yields etc). USDCHF also at pretty key medium support around 0.9500/50, note SNB turned to flexible policy, intra meeting, data dependent basically too..

  • BONDS – UST 10y – a giant H&S pattern – petty amazing moves last few weeks (CHART) - US 10 year is close to the massive 2.7% level. A close below and things could get very "dynamic". It looks like a huge head and shoulders "staring" at us...

  • The market remain convinced that rate hike cycle in 2022, is already dramatically slowing the economy (definitely some macro data has been weaker, yet not dramatically lower, employment data will be looked at Very carefully next for further signs of stress), and thus has been pricing large cuts in 2023/24, it seems rather hopeful (for now at least) with employment levels still pretty strong and inflation to remain at elevated levels for longer (not 9pct, but even if we went to 5-6%, rates should not move much lower)

  • GOLD, metals, copper all up too together with Eq and lower USD, all defying the grim market mood of early-mid July

  • Options on VIX have been getting cheaper as investors give up bets on big shifts in volatility >>>> almost back to levels worth buying/hedging ahead of Sep/Oct?.. (chart) – definitely not worth being short vols down here ..

  • There will be NO daily bits next week, off to the UKai

 

https://think.ing.com/snaps/eurozone-gdp-grew-in-2q-on-covid-tourism-rebound/ Eurozone GDP grew by 0.7% in the second quarter on Covid tourism rebound

The eurozone economy has narrowly escaped the second quarter downturn seen in other major markets like the US and China. Quarter-on-quarter growth improved from 0.5% to 0.7%, and judging from survey data over recent months, this is mainly because of a strong rebound in service sector activity. In the first quarter, the eurozone economy still struggled from weak activity thanks to the Covid-19 Omicron variant, and today’s GDP figures benefit from that. Sectors related to hospitality (restaurants, bars and hotels) have particularly been outperforming in the second quarter, adding to the small positive growth figure. The tourism rebound contributed to strong growth seen in Italy and Spain, with quarter-on-quarter growth of 1% and 1.1% respectively.



We continued to reduce our carbon footprint in 2021, mainly due to how the coronavirus pandemic changed the way we work. To ensure we build on this progress, we enhanced our environmental objectives and measures.

Read our environmental statement https://ecb.europa.eu/ecb/climate/green/html/ecb.environmentalstatement202207~dedabd566b.en.html >>> love this, isn’t the ECB’s mandate about price stability ? .. shouldn’t they focus on inflation above all ?



Whole markets been looking for some pretty bad earnings from large EU banks, devil is in the detail, always, but so far it isn’t that bad at all ! all these are a ‘beat’ :

Nat West +35%

BNPP +20%

Caixabank +40%

BBVA +70%

StanChart +20%


https://apnews.com/article/russia-ukraine-donetsk-prisoners-of-war-30e2e205bab0081c576b944baae82a61 Russia says shelling killed dozens of Ukrainian POWs


https://www.cnbc.com/2022/07/28/roku-earnings-q2-2022-shares-crater-on-recessionary-fears.html Roku shares crater after company misses on earnings and warns of ‘recessionary fears’ – down 70% YTD – amazing


https://www.theguardian.com/commentisfree/2022/jul/29/putin-ruble-west-sanctions-russia-europe

The rouble is soaring and Putin is stronger than ever - our sanctions have backfired


https://www.swissinfo.ch/eng/swiss-national-bank-reports-massive-losses/47789186 Swiss National Bank posts record H1 loss, says no policy impact

https://www.reuters.com/markets/europe/swiss-national-bank-reiterates-it-can-act-any-time-if-needed-2022-07-28/ Swiss National Bank reiterates it can act at any time if needed


https://www.reuters.com/business/energy/shell-total-continue-buyback-bonanza-after-record-profits-2022-07-28/ Energy companies reported record profits. It was an earnings bonanza at oil and gas giants Shell, Total, and Centrica, who are cashing in as household bills soar.


US SEC Commissioner Hester Peirce discussed the outlook for regulation of cryptocurrencies, saying the recent activity in the crypto market has made regulatory minds in Washington more focused https://trib.al/8Pca5Em

https://twitter.com/GaryGensler/status/1552700562533236739 We have rules in our capital markets to safeguard market integrity & protect against fraud & manipulation. If a company builds a crypto market that protects investors & meets the standard of our market regulations, people will more likely have greater confidence in that market.


https://twitter.com/NautilusCap/status/1552638546816770048 VIX Cycle & Seasonality, CCMP Resistance -- pondering a "mosaic" of factors.

EU CPI



Apple revenues were up 2% over the last year, the slowest YoY growth rate since Q3 2020 – not exactly great? . Similarly, Amazon Q2 revenues were up 7% over the prior year, the slowest YoY growth rate in company history. Its stock is currently up 10% in after hours trading. It's not the news but the reaction to the news that matters, revealing expectations/sentiment


Let’s see how well this is going to age in August/September, when real QT starts






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