The Morning Hark - 4 Dec 2023
Today’s focus... Gold ATHs and Crypto not doing too badly either, so what could possibly go wrong? The Week Ahead and a touch of OpenAI espionage and Napoleon to finish off.
Welcome to the new home of The Morning Hark, now available as a standalone newsletter.
If you haven’t upgraded yet, subscribe now for just $6 to continue receiving our daily comprehensive morning briefing for little more than the price of a single cup of coffee.
Alternatively, subscribe to a HarksterPRO subscription for just $24/month to keep reading all our newsletters.
The Morning Hark will gradually move behind a paywall over the next week with limited free content. From December 11th, we will only send the newsletter to paid subscribers.
Overnight Highlights
Prices are at 7.00 GMT/2.00 EST, with changes reflecting movement from midnight GMT
Oil - Oil starting the week off as the previous weeks have with it very much on the back foot. Brent and Crude February futures currently down close to one percent at 78.20 and 73.70 respectively. The OPEC+ decision, or rather its opaqueness, its voluntary nature and the fact that there was clear descent in the ranks, has weighed on oil, on top of a suspicion of impending weakening global demand. Oil clocked up its sixth week of declines and its hard to see where it will get its next break.
EQ - Asian equity markets softening again in the Asia session with the Hang Seng and Nikkei futures down one percent at 16,710 and 33,050 respectively.
The US indices consolidating in Asia with the S&P currently at 4595 whilst the Nasdaq is at 15,975, both holding onto their post Powell gains.
Gold - Gold all time highs and all that. Since the break of the previous high around 2085 its been a one way street for the futures all the way up to a new high of 2150. Short term the previous high will provide some support but there’s not a lot up here in terms of resistance other than market over exuberance and potentially a “leaked” Fed story! The Feb gold futures currently at 2095.
FI - Global yields a touch firmer after Friday’s fireworks. Currently the US2y and US10y sitting at 4.59% and 4.23% respectively. At one point the 10y dipped to a fresh 3 month low below 4.20%.
European yields softening again with the belief that the major central banks are done with the hiking cycle and, despite central bankers protestations, rate cuts will start early next year. The German 10y closed the week at 2.36% and the Italian 10y yield similarly at 4.10%.
UK gilt yields less so, with the belief the BoE will need to hold rates higher for a touch longer than their peers, with the 10y closing at 4.14%.
FX -Quiet Asian session with the USD Index little changed at 103.30. The JPY, EUR and GBP all equally quiet with them currently sitting at 146.70, 1.0870 and 1.2680 respectively.
Interesting to note that although he USD Index is little changed from where we were on Friday the constituent parts of the index have changed quite a bit. The JPY has strengthened further and through the 100dma around 146.89 whilst the EUR is lower.
FX option expiries wise today in the EUR we see €1.5bn rolling off at 1.0925 and €1.2bn at 1.0860. Whilst in USDJPY we have $1.1bn at 147.
Others - Bitcoin and Ethereum been bid all weekend and continued in the Asian session with enthusiasm returning in force to the sector on the back of rate cut expectations. The pair at levels last seen in the middle of last year currently sitting at 41,490 and 2255 respectively.