The S&P 500 future is up 0.8 percent, as risk sentiment is improving despite a disappointing outlook from Nvidia (which was partially countered by good outlooks from Southwest and JetBlue), while the Euro Stoxx 50 is up 0.7 percent and Asian indices ended the trade moderately lower.
Supportive factors are guidance from Shanghai that its lockdown should end in June and relatively solid data from Italy where Industrial Sales increased 2.4 percent in March after 2.9 percent the month before. Also Italian consumer sentiment increased by 2.7 to 102.7 points.
In other news the UK will implement a "temporary and targeted" 25 percent tax on excess oil and gas profits, and the Central Bank of Russia lowered its bank rate by 300 basis points to 11.0 percent.
In the US GDP (-1.5%) declined for the first time since the pandemic, but this is the second estimate (which is only slightly lower than the first one), so investors don’t attach too much weight to this data point.
The big market theme is and certainly will continue to be rate hike expectations, which are the main driver of the risk-on sentiment over the last couple days.
The chart below depicts the average interest rate the market expects in December. Over the last days this measure declined by 25 basis points!
https://www.tradingview.com/x/iZVnG99F/
Gamma discussion
Open interest didn’t change materially yesterday, even though some puts were added between 3500 and 3900 and implied dealer gamma no register -656MM (+67MM d/d).
Above 4000 there no big gamma markers can be identified, which means there will be no “magnets” that have the ability to pull and push the markets around, but nevertheless dealer flows will be supportive as those participant will be forced to buy strength due to their short gamma position.
Above 4240 dealer gamma turns positive, which means a calmer environment, with market makers adding liquidity instead of taking liquidity.
Supportive factors are guidance from Shanghai that its lockdown should end in June and relatively solid data from Italy where Industrial Sales increased 2.4 percent in March after 2.9 percent the month before. Also Italian consumer sentiment increased by 2.7 to 102.7 points.
In other news the UK will implement a "temporary and targeted" 25 percent tax on excess oil and gas profits, and the Central Bank of Russia lowered its bank rate by 300 basis points to 11.0 percent.
In the US GDP (-1.5%) declined for the first time since the pandemic, but this is the second estimate (which is only slightly lower than the first one), so investors don’t attach too much weight to this data point.
The big market theme is and certainly will continue to be rate hike expectations, which are the main driver of the risk-on sentiment over the last couple days.
The chart below depicts the average interest rate the market expects in December. Over the last days this measure declined by 25 basis points!
https://www.tradingview.com/x/iZVnG99F/
Gamma discussion
Open interest didn’t change materially yesterday, even though some puts were added between 3500 and 3900 and implied dealer gamma no register -656MM (+67MM d/d).
Above 4000 there no big gamma markers can be identified, which means there will be no “magnets” that have the ability to pull and push the markets around, but nevertheless dealer flows will be supportive as those participant will be forced to buy strength due to their short gamma position.
Above 4240 dealer gamma turns positive, which means a calmer environment, with market makers adding liquidity instead of taking liquidity.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.