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According to the Yomiuri Shimbun, the Japanese Prime Minister plans to reshuffle his cabinet in mid-to-late September.On August 21, the Federal Reserves reverse repurchase agreement (RRP) facility, open to foreign central banks and other monetary authorities, continued to see increased usage, with the balance rising for two consecutive weeks, reflecting that overseas official institutions are continuing to increase their dollar cash reserves. As of August 19, the amount of foreign entities holding funds in the Feds reverse repurchase pool rose to $373 billion, up from $357 billion a week earlier. Since August 5, the usage of this tool has increased by approximately $56 billion, marking the largest two-week increase since October 2022. The market is closely watching changes in the foreign reverse repurchase balance for signs that Japan is rebuilding dollar liquidity after intervening in the foreign exchange market last month to support the yen.Conflict Update: 1. US military updates casualty figures for the Iranian conflict: 18 dead, 757 wounded. 2. Iranian Revolutionary Guard: Houthi forces combat capabilities surge; new war will utilize "more ruthless" weapons. 3. Houthi forces: Successfully attacked Saudi Najran airport and Saudi Aramco facilities in the area. Strait of Hormuz: 1. Negotiations between Iran and Oman on a passage mechanism in the Strait of Hormuz are nearing completion. 2. Oman and Japan emphasize the urgency of opening the Strait of Hormuz. Peace Talks: 1. US officials: The White House believes talks between Iran and Oman broke down weeks ago. 2. Qatar states that current efforts are focused on mediating relations between the US and Iran. 3. Qatar seeks to join forces with Egypt to push for a US-Iran ceasefire, calling for ensuring unimpeded navigation in the strait. Other Matters: 1. Trump announces "the toughest economic action in history" against Iran. 2. Bulgarian Defense Minister: No direct threats from Iran seen. 3. US Treasury Department: The US issues new sanctions related to Iran. 4. Iranian Ambassador: Welcomes Russias assistance in improving relations between Iran and Gulf states. 5. Israeli Defense Minister: Erdogan is dragging Turkey into a dangerous adventure in Syria. 6. Iraq: Construction of new oil export pipelines may take 2-3 years. 7. Iran: The US says Iran is "on the brink of collapse," and those seeking help know who is truly in control. 8. According to CNBC: Irans inflation rate has soared to 89%, with food prices rising by 164%. 9. US Central Command says the USS George Washington aircraft carrier has been deployed to the Middle East. 10. According to CNN: Sources reveal that the USS Abraham Lincoln aircraft carrier has begun its return voyage, but remains within the Fifth Fleets operational area. 11. Six countries, including France, Germany, and Italy, issued a joint statement opposing Israels progress on the E1 settlement project. 12. Iranian Supreme National Security Council Secretary Rezaei: Faced with economic pressure from Trump, Iran should withdraw from the Treaty on the Non-Proliferation of Nuclear Weapons. 13. Iranian Foreign Ministry: Condemns the USs new economic and trade sanctions against Iran, stating that Iran will use "all tools and capabilities" to safeguard its national interests and the legitimate rights of the Iranian people. 14. Iranian Foreign Minister Araqchi: Many of Trumps remarks are intended to divert the American publics attention from the domestic financial crisis, namely the record US debt and the sharp rise in bank interest rates. 15. UK Maritime Trade Operations Office: A report has been received of an incident 136 nautical miles east of Mukalla, Yemen. An oil tanker was approached by an unauthorized vessel while transiting the western Gulf of Aden.On August 21st, sources revealed that artificial intelligence company Anthropic is planning to bring in Citigroup as a lead underwriter for its initial public offering (IPO). If the deal goes through, Citigroup will join Morgan Stanley, Goldman Sachs, and JPMorgan Chase as lead underwriters. Anthropic may file for listing with regulators as early as the end of this month. Lead underwriter status for a large IPO not only means substantial underwriting commission income but also helps improve an investment banks ranking in the equity financing market. Citigroup currently ranks among the top IPO underwriters in the US due to its participation in SpaceXs record-breaking $86.2 billion IPO. Sources indicated that Anthropics listing preparations are still underway, and the final underwriting syndicate list may be adjusted, with the possibility of adding other investment banks.Market news: Anthropic plans to add Citigroup (CN) as the lead underwriter in its large IPO.

Two Trades to Watch: DAX, GBP/USD

Jimmy Khan

May 07, 2022 10:43


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The DAX is falling as industrial output declines.


After a slaughter on Wall Street that saw the Nasdaq finsh 5% down, European equities have begun in the red, extending losses from the previous day.


Fears of inflation, stagflation, and recession are weighing on the market as we approach the weekend. The DAX is expected to shed 1.4 percent this week, marking the fifth consecutive week of losses.


In March, German industrial output decreased -3.9 percent on a month-over-month basis, down from 0.2 percent in February and considerably below the -1 percent drop forecast. The negative report comes on the heels of a sharp drop in German manufacturing orders in March. The data represents the economic effect of the Russian conflict on Germany and the Eurozone as a whole.


Germany does not have any additional statistics due today. Sentiment and the US NFP announcement will affect European indexes.