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Market Updates

Markets Today – 1 July 2022

MARKET WRAP – 1 July 2022

The last day of trading for the quarter has seen some big moves. German bunds rallied hard, led by the short end on a combination of factors, including relief from no upside surprise to French CPI inflation, month-end buying, and safe-haven flows as the Euro Stoxx 600 fell 1½%. Germany’s unemployment rate shot up by 0.3 percentage points to 5.3% which looked alarming at face value, but the sharp reversal of trend was explained by refugees from the war in Ukraine adding to jobless claims. Germany’s bond market saw the 2-year rate down a massive 20bps to 0.61% and the 10-year rate down 18bps to 1.33%. The latter has traded a 60bps range of 1.33-1.93% in the past two weeks.

Traders continue to pare back how much tightening the ECB will do, with “only” 140bps of hikes priced for the four meetings left this year compared to 180bps priced two weeks ago. This dynamic dragged rates down right across Europe and spilled over into the Treasuries market. The weaker momentum suggests a lower contribution to Q2 GDP from private consumption, leading economists to revise down their estimates. Some Economists now expects Q2 GDP at an annualised minus 0.5%, following the 1.6% annualised contraction in Q1, reaching the definition of technical recession.

The Atlanta Fed GDP Now index fell to minus 1.01%. Morgan Stanley revised Q2 down from 2% to 0.3%, so whether the US economy prints two negative quarters in a row looks like a close call. Initial jobless claims remained close to a five-month high and yet another regional PMI, this time for Chicago, fell by more than expected. The monthly gain for the core PCE deflator was 0.3%, but 0.348% on unrounded figures which annualises to 4.3%, considered by markets to be too high for comfort. US Treasury yields are lower with the 2 and 10- year rates down 11bps, both now back below 3%. The US 10-year break even inflation rate is down 2bps to 2.37%, near its low for the year after a steep decline and after trading above 3% just over two months ago. This shows increasing confidence regarding the Fed to bring inflation sustainably down, supported by the more hawkish talk and determination in its part to do the job. The S&P500 has been whipsawing, opening on a weak note to be down over 2% at one stage, recovering to flat and back down 0.9% as we go to print.

FX

AUD/USD stages a recovery after plunging to fresh two-week lows around 0.6850s, reclaiming the 0.6900 figure, nearly gaining 0.60% on Thursday, after US inflation shows some signs of topping. At the time of writing, the AUD/USD trades at 0.6900 during the Sydney open.

MARKET OUTLOOK

The AUD/USD remains in a downtrend, though slightly consolidating in the 0.6850-0.6950 range. Markets believe the major’s price action on Thursday is rising sharply, and a break above the June 30 high at 0.6920 might open the door for further gains, but markets expect solid resistance near 0.7000 will be challenging to overcome. Contrarily, markets believe a continuation to the downside is in play, though it would accelerate once sellers reclaim 0.6850, which is expected to send the pair tumbling towards the YTD low near 0.6828, followed by 0.6800.

Overnight Currency Ranges

Currency Pair Low High
AUD/USD 0.68535 0.6918
EUR/USD 1.0381 1.0489
GBP/USD 1.2093 1.2189
USD/JPY 135.56 136.8
NZD/USD 0.6198 0.6253
USD/CAD 1.2861 1.2933
USD/CNH 6.6902 6.7116
AUD/JPY 93.29 94.28
AUD/NZD 1.1046 1.1089
DXY 104.645 105.541

Disclaimer:This material is provided by Navigate Global Payments (Navigate) ACN 615 699 888, AFSL 502711.  The material contains general commentary only and does not constitute investment or any other advice.  Certain types of transactions, like futures, options and high yield securities can be risky, and not suitable for all investors.  This information has been prepared without considering your objectives, financial situation or needs.  Please seek your own independent legal or financial advice before proceeding with any investment decision. The information is believed to be accurate at the time of compilation and is provided in good faith.  Navigate does not warrant the accuracy or completeness of any information contributed by a third party. The information is subject to change without notice and Navigate is under no obligation to update the information. The information contained in this material are opinions of the author at the time of writing and does not constitute an offer, recommendation to act, a solicitation of an offer, or an inducement to subscribe for, purchase or sell any financial instrument or to enter a legally binding contract.  This information, including any assumptions and conclusions is not intended to be a comprehensive statement of relevant practise or law that is often complex and can change.  Past performance is not a reliable indicator of future performance. Any forecasts given in this material are predictive in character.

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Market Updates

Markets Today – 30 June 2022

MARKET WRAP – 30 June 2022

  • US equities were mixed as the S&P and Nasdaq lost ground, but the Dow held firm up 0.3%. Brent gave back recent gains to be trading around $115. Currencies were again on the back foot to the USD, pushing Euro to 1.0435 lows and AUD to 0.6862. Asian equities were lower on Wednesday, with the Nikkei -0.9% and Hang Seng down 1.9%. The ASX fell 0.9% on Wednesday, led by losses in the tech sector.
  • The Fed’s Mester said he wants to see US rates above 4% next year. Mester added that high inflation has been clouding consumer confidence in the US and that rate rises are very necessary to get inflation down, while advocating for a 75bp rate rise in July. European equities opened lower with the FTSE 100 -0.5% and DAX down 1.22%. US 10-year yields fell back to 3.15% and Brent crude was lower at $117.69. Into the NY open and headlines out of the NATO Summit in Madrid with the alliance formally inviting Finland and Sweden to join while also agreeing a new strategic concept that reflected a deteriorated relationship with Russia.
  • US Q1 GDP was revised down to -1.6% from a flash reading of -1.5% while Personal Consumption was revised down to 1.8m 3.1%. Core PCE however was revised up to 5.2% from 5.1%. Little reaction to the data with markets waiting for the panel discussion between Fed Chair Powell, BOE Governor Bailey and ECB President Lagarde. Across the event, Fed Governor Powell focussed on inflation and that the strength of the US economy would allow the Fed to raise rates to the level required to bring it back to 2%. He noted there would be pain from the process but the pain of not getting inflation back to target would be worse. Governor Bailey noted the UK was in a tough situation with a slowing economy but also noted the pain of not getting inflation under control was worse than doing so.
  • Wall St was mixed from the open with the Dow settling with 0.5% type gains over the NY morning though the S&P and Nasdaq were both near flat. Meanwhile, European markets remained heavy into the close with the FTSE the best performer as it lost a little over 0.1%. The Dow finished up circa 0.3%, however the S&P and Nasdaq didn’t fare as well closing marginally in the red.

 FX

  •  AUD/USD traded sideways around 0.6910 before falling to a low of 0.6878 as the USD strengthened across the board. Into the London lunch and AUD/USD fell back after rebounding from lows of 0.6862 and NZD/USD continued lower to 0.6226. EUR/USD fell from session highs of 1.05355, down towards 1.0513 after weaker than expected German inflation data. GBP/USD moved lower, reaching lows of 1.2143. USD/CAD bounced lower to 1.2855 while USD/JPY continued higher at 136.50.
  • Following the US data releases and commentary the greenback was stronger across the NY morning with USD/JPY up to 137.00 highs and levels last seen in 1998. EUR/USD slipped to lows of 1.0467, GBP/USD fell to 1.21055 and NZD/USD made lows of 0.6207 with the local unit matching earlier 0.6862 lows. USD/CAD up to 1.2900 highs in the move. Into the NY afternoon and EUR/USD remained offered and fell to new lows of 1.0435 though other majors generally recovered a little off their respective lows against the greenback leading into the Sydney morning. At the time of writing AUD/USD sits at 0.6878.

MARKET OUTLOOK

  • China’s June PMI will be released today, and the indices could rebound to above 50. For manufacturing, the two subindices worth watching are New Orders and Supplier’s Delivery Time. US Personal Income and Spending data is also scheduled for today, with personal consumption likely to have moderated relative to April’s strong +0.7% m/m reading.
  • The US PCE price index is expected today, and markets expect broad-based inflation is likely to have persisted in May, as was evident in the CPI data released earlier this month. Higher gasoline prices are expected to remain a key driver of headline inflation. Monthly core services are expected to have remained firm. Markets believe core goods inflation may show a stronger MoM gain. Nonetheless, the overall trend is expected to continue to show a deceleration. The trimmed mean PCE price index, a measure of underlying inflation, will be in focus for any further signs of broadening inflation.
  • AUD/USD has broken down through 0.6900 and now markets are looking for the support at 0.6850/60 that has held so far in 2022. Markets expect any bounces back above 0.6950 will see sellers re-emerge.

Overnight Currency Ranges 

Currency Pair Low High
AUD/USD 0.6862 0.6920
EUR/USD 1.0435 1.0536
GBP/USD 1.2106 1.2212
USD/JPY 135.78 137.00
NZD/USD 0.6207 0.6257
USD/CAD 1.2844 1.2900
USD/CNH 6.6930 6.7176
AUD/JPY 93.43 94.30
AUD/NZD 1.1032 1.1070
DXY 104.35 105.14

Source Bloomberg

Disclaimer:This material is provided by Navigate Global Payments (Navigate) ACN 615 699 888, AFSL 502711.  The material contains general commentary only and does not constitute investment or any other advice.  Certain types of transactions, like futures, options and high yield securities can be risky, and not suitable for all investors.  This information has been prepared without considering your objectives, financial situation or needs.  Please seek your own independent legal or financial advice before proceeding with any investment decision. The information is believed to be accurate at the time of compilation and is provided in good faith.  Navigate does not warrant the accuracy or completeness of any information contributed by a third party. The information is subject to change without notice and Navigate is under no obligation to update the information. The information contained in this material are opinions of the author at the time of writing and does not constitute an offer, recommendation to act, a solicitation of an offer, or an inducement to subscribe for, purchase or sell any financial instrument or to enter a legally binding contract.  This information, including any assumptions and conclusions is not intended to be a comprehensive statement of relevant practise or law that is often complex and can change.  Past performance is not a reliable indicator of future performance. Any forecasts given in this material are predictive in character.

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Market Updates

Markets Today – 29 June 2022

MARKET WRAP – 29 June 2022

  • US equities gave up recent gains with the Nasdaq 3% lower. Oil continued its march higher, as did Iron Ore to now be up 11% in the last week. The USD was stronger against most comers, with the NZD among the worst performers trading down to 0.6238. AUD also making new daily lows at 0.69045 late in the NY session. The ASX closed 0.86% higher, with energy leading the gains while materials and utilities also climbed.
  • The ECB’s Kazaks said that it’s worth looking at a 50bp hike in July, with this week’s Eurozone CPI possibly helping his case. Shortly after, Lagarde reaffirmed the ECB’s intention to raise by 25bps in July and said the supply shock could linger for longer. Lagarde also mentioned that inflation in the Eurozone would be undesirably high for some time and that the size of the September rate hike will be higher if needed. European equities were higher on the open, with the FTSE 100 up 1.04% and CAC +1.08%. US 10-year treasuries climbed sharply to 3.21. Brent Crude rebounded from the day’s lows, reaching $116.83. Little in the way of meaningful US data early in the session. Released later in the NY morning and US June Consumer Confidence fell to 98.7, down from 103.2 and below expectations of 100.0.
  • Wall St opened in positive territory with the Dow and S&P up around 1% while gains on the Nasdaq were around half this though all slipped into the red over the NY morning. Across the Atlantic, European markets paring gains though still closing in positive territory with the FTSE up 0.9% at the closing bell while the CAC and DAX were up either side of 0.5%. Fed’s Governor Daly hit the wires saying that the Fed can reduce inflation by reducing demand and suggested a soft landing was possible due to the strength of the US economy. She predicted that the unemployment rate would rise slightly, and growth would fall to below 2% though a recession would be avoided.

 FX

  •  AUD/USD traded sideways between 0.6916 and 0.6938 before climbing to a high of 0.6965 later in the session. EUR/USD initially fell from a high of 1.0606 towards 1.0576 on Lagarde’s comments but rebounded back towards 1.0585. Into London Lunch and AUD/USD traded sideways around 0.6950 having drifted off 0.6965 highs while NZD/USD slipped to lows near 0.6270. Having printed above 1.0600 early in the European session, EUR/USD fell under 1.0560 while GBP/USD fell to the 1.2220 area having printed at 1.2291 highs hours earlier. USD/JPY climbed steadily, hitting a high of 136.295 and USD/CAD fell back to 1.28195 lows before recovering slightly.
  • Little reaction to any of the US data points with the USD firming across the board over the NY morning and into the London rate set. The local unit fell to lows of 0.69145 while NZD/USD fell to 0.6245, EUR/USD dipped to 1.05025 and GBP/USD made lows under 1.2200.USD/JPY moved modestly higher to reach 136.32 while USD/CAD made highs of 1.2878. Markets were fairly subdued over the NY afternoon though the USD remained firm with the commodity currencies under the most pressure. AUD/USD fell to 0.6906 lows ahead of the Sydney open with NZD/USD down to 0.62385 while USD/CAD moved modestly higher. GBP/USD fell to 1.2181 lows while USD/JPY moved up to 136.38. AUD/USD sits at 0.6905 at the time of writing.

MARKET OUTLOOK

  • Equities continue to set the risk tone with the retreat on Wall Street coinciding with new lows in the antipodeans. Interesting Oil and Iron Ore continue to rally, which along with coal continue to provide robust revenue numbers for producers.
  • Month and financial year end flows have been mixed so far, with the risk sentiment in the driving seat as to directional flows. AUD/USD now resting right on its support at 0.6900, and likely to find sellers ahead of 0.7000 as the week goes on.

Overnight Currency Ranges 

Currency Pair Low High
AUD/USD 0.6905 0.6965
EUR/USD 1.0503 1.0606
GBP/USD 1.2181 1.2291
USD/JPY 135.12 136.38
NZD/USD 0.6238 0.6314
USD/CAD 0.0000 0.0000
USD/CNH 6.6688 6.7137
AUD/JPY 93.43 94.70
AUD/NZD 1.0988 1.1078
DXY 103.77 104.61

 Source Bloomberg

Disclaimer:This material is provided by Navigate Global Payments (Navigate) ACN 615 699 888, AFSL 502711.  The material contains general commentary only and does not constitute investment or any other advice.  Certain types of transactions, like futures, options and high yield securities can be risky, and not suitable for all investors.  This information has been prepared without considering your objectives, financial situation or needs.  Please seek your own independent legal or financial advice before proceeding with any investment decision. The information is believed to be accurate at the time of compilation and is provided in good faith.  Navigate does not warrant the accuracy or completeness of any information contributed by a third party. The information is subject to change without notice and Navigate is under no obligation to update the information. The information contained in this material are opinions of the author at the time of writing and does not constitute an offer, recommendation to act, a solicitation of an offer, or an inducement to subscribe for, purchase or sell any financial instrument or to enter a legally binding contract.  This information, including any assumptions and conclusions is not intended to be a comprehensive statement of relevant practise or law that is often complex and can change.  Past performance is not a reliable indicator of future performance. Any forecasts given in this material are predictive in character.

Categories
Market Updates

Markets Today – 28 June 2022

MARKET WRAP – 28 June 2022

  • US equities finished lower after trading in the black earlier in the session. Commodities had a good day with Oil and Iron Ore both finishing up. US treasuries fell as did the USD, however the AUDUSD had a relatively benign trading range after finding comfort at 0.6920/30 in Asia. Asian equities finished higher to start the week, with the Hang Seng was up 2.5% as more reopening news from China hit the wires. The ASX rose 1.9% with bank stocks rebounding strongly. AUD/USD fell sharply to 0.6906 to then slowly climbed back above 0.6940 as Europe entered the session.
  • The EU Energy Commissioner has said Russian gas supply to the EU has halved from the level it was at last year, adding that it could decrease further. European equities opened higher with Euro Stoxx 50 +0.5% and FTSE100 +0.6%. US Treasuries slipped, pushing the rate on the 10-year note to 3.14%. Industrial metals rebounded, while oil and European natural gas prices rose. Brent crude rose 0.6% to $113.79 a barrel.
  • The NY open saw May Durable Goods Orders rise 0.7% to beat forecasts of a 0.1% increase with the core measure also up 0.7% and beating estimates of 0.3%. US Pending Home Sales for May rose 0.7% MoM to beat forecasts of a 4.0% contraction. No reaction to the data with Wall St showing modest gains in early trade.    
  • The FTSE and DAX gained more than 0.5% on the day though other indices closed in the red with the CAC shedding 0.4%. Wall St meanwhile drifted lower to slide into negative territory into the NY afternoon. Little movement over a subdued NY afternoon with majors generally drifting near the middle of their respective daily ranges. Wall Street slipped into the close with 0.2-0.3% losses from the Dow & S&P.

       FX 

  • Overnight AUD/USD traded sideways around 0.6920 and NZD/USD fell to lows under 0.6300. EUR/USD moved lower towards 1.0560 having been above 1.0590 earlier in the session while GBP/USD fell from highs of 1.23305 to a session low of 1.2256. USD/JPY climbed to a high of 135.55 while USD/CAD moved higher to trade above 1.2900.
  • The greenback firmed in response to its data results with GBP/USD sliding to new lows of 1.22385 while NZD/USD fell to 0.6283 and USD/CAD moved up to 1.2915 highs. AUD/USD and EUR/USD drifting towards their Asian session lows though failing to break new ground. The USD was sold into the London rate set and EUR/USD was the only real beneficiary as it moved up through 1.0600 to hit highs of 1.0615. Gains elsewhere were more limited and largely reversed into the NY afternoon. AUD/USD opens this morning at 0.6921.

 MARKET OUTLOOK

  • A quiet Monday in currencies is likely to be followed by a similarly sedate Tuesday, as the Asian data calendar remains bare. Markets saw JPY selling midway through Monday morning, which moved the AUDUSD to its intraday low but given local stocks and Iron Ore traded higher on the day, the weakness was short lived.
  • The S&P is now 20% lower than it was at the start of 2022, having rallied 5% from recent lows. The question markets are asking now is whether the 5% is a dead cat bounce, or the floor being formed in the short term. Markets expect AUD/USD to be supported ahead of 0.6900, and likely to find sellers ahead of 0.7000 as the week goes on.

Overnight Currency Ranges 

Currency Pair Low High
AUD/USD 0.6906 0.6958
EUR/USD 1.0550 1.0615
GBP/USD 1.2239 1.2331
USD/JPY 134.53 135.55
NZD/USD 0.6283 0.6326
USD/CAD 0.0000 0.0000
USD/CNH 6.6773 6.6940
AUD/JPY 92.94 94.06
AUD/NZD 1.0965 1.1001
DXY 103.67 104.21

Source Bloomberg

 

Disclaimer:This material is provided by Navigate Global Payments (Navigate) ACN 615 699 888, AFSL 502711.  The material contains general commentary only and does not constitute investment or any other advice.  Certain types of transactions, like futures, options and high yield securities can be risky, and not suitable for all investors.  This information has been prepared without considering your objectives, financial situation or needs.  Please seek your own independent legal or financial advice before proceeding with any investment decision. The information is believed to be accurate at the time of compilation and is provided in good faith.  Navigate does not warrant the accuracy or completeness of any information contributed by a third party. The information is subject to change without notice and Navigate is under no obligation to update the information. The information contained in this material are opinions of the author at the time of writing and does not constitute an offer, recommendation to act, a solicitation of an offer, or an inducement to subscribe for, purchase or sell any financial instrument or to enter a legally binding contract.  This information, including any assumptions and conclusions is not intended to be a comprehensive statement of relevant practise or law that is often complex and can change.  Past performance is not a reliable indicator of future performance. Any forecasts given in this material are predictive in character.

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Market Updates

Markets Today – 27 June 2022

MARKET WRAP – 27 June 2022

US equities finished the week in the black, but risk sentiment was varied as Oil posted its first back-to-back weekly loss since April. Iron Ore rallied off its lows and the July thermal coal contract remains close to $400 USD/t. The Aussie dollar closed the week at 0.6941. Asian equities finished Friday’s session higher with the Hang Seng outperforming up 2.10%. The ASX closed +0.8%, taking its weekly gain to 1.6%, as tech and lithium shares rebounded.

Germany’s economic minister Habeck said that certain industries would have to be shut down if there is not enough gas, adding that the situation will be tight this winter. In the UK, May Retail Sales ex Fuel printed at 0.7% m/m, beating expectations of -0.9%. UK consumer confidence has fallen to a record low, dropping 1 point to -41 in June. European equities opened higher with the Euro Stoxx 50 +0.8% and FTSE100 +0.6. The yield on 10-year Treasures advanced 2bps to 3.11%. Oil’s WTI trading near $105 a barrel. Markets are now wagering on less than 150bps of ECB rate hikes by year-end.

RBA’s Lowe hit the wires saying that the RBA is not expecting there to be any kind of recession, adding that the challenge is to bring inflation down painlessly. We then heard from the Fed’s Bullard who said the US economy has shown tremendous resilience, and from the household side we have not seen signs of pullback. He continued by saying that rate hikes are going to slow the economy to a ‘trend pace’ of growth. We then heard from ECB’s Guindos who said that the Euro-zone may have negative growth in 2023, adding that we will see high inflation next month. EUR/USD continued to fall on the headlines toward 1.0515.

Wall St remaining firm throughout the NY afternoon to close with large gains with the Dow up 2.7% while the S&P gained a little over 3% and the Nasdaq closed 3.3% higher on the day.

                                                  FX

 AUD/USD had a choppy session, climbing to highs of 0.6919 before falling to 0.6889 lows into the European morning. Into London Lunch, AUDUSD climbed back towards daily highs, just short of 0.6920. NZD/USD continued to edge higher reaching 0.6313. EUR/USD fell from 1.0555 highs back below 1.0535. GBP/USD climbed sharply to 1.23085. USD/CAD traded a range above 1.2959 lows. USD/JPY climbed steadily to trade up to highs of 135.31.

 The USD was hit on the weaker Michigan survey with AUD/USD reaching to highs of 0.6952 while NZD/USD reached 0.6325, EUR/USD moved up to 1.0571 and GBP/USD made highs of 1.2319. USD/CAD fell to lows of 1.2900 into the London rate set while USD/JPY initially fell though recovered in quick time.

Markets were fairly subdued over the NY afternoon though the commodity currencies remained bid with further modest gains for the antipodeans. while USD/CAD fell under 1.2900 in late trade. Other majors drifting near the middle of their respective daily ranges to close the week.

 

MARKET OUTLOOK

A relatively quiet week for economic data. With CPI data out of the Euro-area towards the end of the week helping to shape ECB rhetoric and policy response. In Asia, the key event will be China’s PMI data on Thursday, we have pencilled in a further rebound to above 50 for the indices. We will hear from several FOMC participants through the week, most notable will be comments from voting member Loretta Mester.

AUD/USD continues to follow the whims of risk sentiment. As such, currency markets are watch equity markets for a lead, but markets expect offers to emerge back towards 0.7000. Dips continue to be well bought by the local exporter community, and markets expect that to be the case around 0.6850 again. AUS/USD at .6941 at the time of writing.

Overnight Currency Ranges  

Currency Pair Low High
AUD/USD 0.6889 0.6956
EUR/USD 1.0512 1.0571
GBP/USD 1.2243 1.2319
USD/JPY 134.36 135.40
NZD/USD 0.6276 0.6325
USD/CAD 1.2890 1.2998
USD/CNH 6.6755 6.7005
AUD/JPY 92.74 94.02
AUD/NZD 1.0957 1.0995
DXY 103.95 104.51

Source Bloomberg

Disclaimer:This material is provided by Navigate Global Payments (Navigate) ACN 615 699 888, AFSL 502711.  The material contains general commentary only and does not constitute investment or any other advice.  Certain types of transactions, like futures, options and high yield securities can be risky, and not suitable for all investors.  This information has been prepared without considering your objectives, financial situation or needs.  Please seek your own independent legal or financial advice before proceeding with any investment decision. The information is believed to be accurate at the time of compilation and is provided in good faith.  Navigate does not warrant the accuracy or completeness of any information contributed by a third party. The information is subject to change without notice and Navigate is under no obligation to update the information. The information contained in this material are opinions of the author at the time of writing and does not constitute an offer, recommendation to act, a solicitation of an offer, or an inducement to subscribe for, purchase or sell any financial instrument or to enter a legally binding contract.  This information, including any assumptions and conclusions is not intended to be a comprehensive statement of relevant practise or law that is often complex and can change.  Past performance is not a reliable indicator of future performance. Any forecasts given in this material are predictive in character.

Categories
Market Updates

Navigate Global Payments – Markets Today 24th June 2022

 

  • MARKET WRAP – 24th June 2022
  • Stocks were firmer Thursday but saw choppy price action as growth woes on poor PMI data were countered with the continued fall in yields and commodity prices.

 

  • Weak growth-related data and concerns of an economic slowdown spurred risk aversion on Thursday. AUD/USD is down for a second consecutive day and approaching the June monthly low at 0.6850

 

  • The bond fade into the afternoon was accentuated by Fed’s Bowman giving some hawkish remark, while Fed Chair Powell’s second and final day in Congress provided little new.

 

  • In FX, the DXY was ultimately flat as initial strength on European PMI weakness pared after the later US figures.

 

  • FED: Chair Powell returned for his second day, in front of the House Finance Committee, and while he largely reiterated his familiar tone the Chair noted as the economy returns to normal, Fed expects profit margins will also normalise.

 

  • Fed Chair Powell said inflation expectations are anchored but added it is not enough as over time they will come under pressure, while Powell said he would be reluctant to cut rates when asked.

 

  • Powell also said the Fed would not raise its inflation target and that the end-point for the balance sheet is roughly USD 2.5tln-3.Otln smaller than it is now.

 

  • Fed’s Bowman (voter) said another 75bps rate hike will be appropriate in July and hikes of at least 50bps at the next few subsequent meetings.

 

  • On inflation, Powell noted inflation expectations are anchored but that’s not enough as over time they will come under pressure. Meanwhile, Bowman (voter) joined the chorus for the July meeting and said another 75bps rate hike will be appropriate, and hikes of at least 50bps at the next few subsequent meetings.

 

  • Bowman added that further rate hikes may be needed depending on how the economy evolves, while she is committed to a policy that will bring the real FFR back into positive territory.

 

 


TODAY’S KEY RISK EVENTS

  • Looking ahead, Bullard (2022 voter) and Daly (2024 voter) are speaking Friday
  • • JP – CPI y/y
  • • JP – CPI ex. Fresh Food, Energy
  • • JP – PPI Services
  • • AU – RBA’s Lowe-Panel Discussion
  • • UK – BOE’s Huw Pill Speaks
  • • UK – BOE’s Haskel Speaks
  • • US – New Home Sales

Source FX Street

  • CURRENCY/INDICIES RANGES
Currency Pair Low High
AUD/USD 0.68695 0.6925
EUR/USD 1.04835 1.05805
GBP/USD 1.2171 1.2294
USD/JPY 134.265 136.2
NZD/USD 0.62485 0.63085
USD/CAD 1.2937 1.3016
USD/CNH 6.6949 6.7194
AUD/JPY 92.61 94.37
AUD/NZD 1.0971 1.103
DXY 104.06 104.769

 

Equity Index Daily % Change Closing Level
ASX 0.3% 6528
SHANGHAI COMP 1.6% 3320
NIKKEI 0.1% 26171
FTSE -1.0% 7020
DAX -1.8% 12913
CAC -0.6% 5883
DOW JONES 0.6% 30677
S&P 500 1.0% 3796
NASDAQ 1.6% 11232
VIX 0.3% 29.05
   
Commodity Daily % Change Closing Level
CRUDE OIL -1.9% 104.1
ICE NAT GAS 1.8% 186.8
GOLD -0.8% 1823.5
SILVER -2.1% 21.0
SGX IRON ORE -0.9% 115.1
CMX COPPER -5.1% 374.9
ICE SUGAR -0.7% 18.4
ICE COTTON -5.6% 186.8
CBT WHEAT -3.8% 950.8
BITCOIN 5.2% 20883.8
     
Rates Markets Yield Daily Change
US 2 YEAR 3.02% -4.2
US 10 YEAR 3.09% -6.7
AUST 2 YEAR 2.89% -11.0
AUST 10 YEAR 3.85% -13.4

Source Bloomberg

   

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Disclaimer: This material is provided by Navigate Global Payments (Navigate) ACN 615 699 888, AFSL 502711. The material contains general commentary only and does not constitute investment or any other advice. Certain types of transactions, like futures, options and high yield securities can be risky, and not suitable for all investors. This information has been prepared without considering your objectives, financial situation or needs. Please seek your own independent legal or financial advice before proceeding with any investment decision. The information is believed to be accurate at the time of compilation and is provided in good faith. Navigate does not warrant the accuracy or completeness of any information contributed by a third party. The information is subject to change without notice and Navigate is under no obligation to update the information. The information contained in this material are opinions of the author at the time of writing and does not constitute an offer, recommendation to act, a solicitation of an offer, or an inducement to subscribe for, purchase or sell any financial instrument or to enter a legally binding contract. This information, including any assumptions and conclusions is not intended to be a comprehensive statement of relevant practise or law that is often complex and can change. Past performance is not a reliable indicator of future performance. Any forecasts given in this material are predictive in character.

 

 

 

 

 

Disclaimer:This material is provided by Navigate Global Payments (Navigate) ACN 615 699 888, AFSL 502711.  The material contains general commentary only and does not constitute investment or any other advice.  Certain types of transactions, like futures, options and high yield securities can be risky, and not suitable for all investors.  This information has been prepared without considering your objectives, financial situation or needs.  Please seek your own independent legal or financial advice before proceeding with any investment decision. The information is believed to be accurate at the time of compilation and is provided in good faith.  Navigate does not warrant the accuracy or completeness of any information contributed by a third party. The information is subject to change without notice and Navigate is under no obligation to update the information. The information contained in this material are opinions of the author at the time of writing and does not constitute an offer, recommendation to act, a solicitation of an offer, or an inducement to subscribe for, purchase or sell any financial instrument or to enter a legally binding contract.  This information, including any assumptions and conclusions is not intended to be a comprehensive statement of relevant practise or law that is often complex and can change.  Past performance is not a reliable indicator of future performance. Any forecasts given in this material are predictive in character.

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Market Updates

Navigate Global Payments – Markets Today 23rd June 2022

 

 

MARKET WRAP – 23rd June 2022

  • Dollar was lower Wednesday and hit a trough of 103.850 as analysts note a brace for further Fed hikes and the possibility that  accelerated monetary tightening could hasten the arrival of lower inflation and possibly a recession, impacting the Dollar.
  • Bank economists are racing to move their US recession probabilities up from 20/30% to 50% and the price of just about everything is falling. Oil, lumber, wheat, gasoline, crypto, equities, copper down.
  • Canadian inflation above exp. across all metrics; Jordan says SNB may need to hike again.
  • A Fed research paper showing the US economy facing elevated risks of a recession over the next one to two years, with just over a 50% chance of a recession over the next year.
  • Meanwhile, headlines drew attention to Chair Powell refusing to rule out a 100bps hike when pressed on it in his Senate hearing amplifying concerns over a hard landing.
  • Note that money markets are seeing the Dec’22/March23 futures start to flirt with inversion, while 2yr and 10yr yields are back down to levels not seen since the May CPI release on June 10th.
  • Aussie and Kiwi both saw more pronounced losses, as previously mentioned, but clawed back some of the lost ground as the risk-aversion faded. As such, AUD/USD traded between a range of 0.6973-0.6882, whilst NZD/ AUD parameters were 0.6337- 0.6245 but both are well off the extremes.


Federal Reserve J,Powell Senate Testify breakdown

  • Chair Powell testifying to the Senate reiterated much of his usual tone, but he did say he will never take anything off the table when asked about a 100bps rate hike, reaffirming his hawkish remarks that the policy rate is still at a relatively low level and wants it up to a more ‘neutral-ish’ level.
  • Moreover, the Chair added additional rate increases are priced in and this is appropriate, and reiterated ongoing rate hikes will be appropriate with the pace dependent on data with decisions made
    “meeting by meeting”.
  • On the June meeting, Powell added he was persuaded that it was important that a 75bps hike was made. Harker (2023 voter) said the Fed needs to get to a neutral rate of 2.5% quickly and should be above 3% by year-end, whilst a 75bps hike helps Fed get to neutral.
  • On the July meeting, Harker added he is not yet ready to decide whether to back 50bps or 75bps. Evans (non—voter; departing) spoke heavily again, and stated the Fed will need to raise interest rates “a good deal more” over coming months, whilst noting  there are many risks to the downside and must be ready to adjust its policy stance.
  • Lastly, Evans later remarked 100bps hike isn’t necessary, and 75bps hike in July would be in line with continued concerns that inflation isn’t slowing. However, by year-end he thinks the Fed will be doing 25bps hikes.


TODAY’S KEY RISK EVENTS

  • COMING up: Data: Australian, EZ, UK & US Flash PM’s, US IJC Events: Norges Bank, CBRT & Banxico Policy Announcements, US
  • Bank Stress Test Results Speakers: Fed’s Powell (House Finance Committee).

Source FX Street

   

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Disclaimer: This material is provided by Navigate Global Payments (Navigate) ACN 615 699 888, AFSL 502711. The material contains general commentary only and does not constitute investment or any other advice. Certain types of transactions, like futures, options and high yield securities can be risky, and not suitable for all investors. This information has been prepared without considering your objectives, financial situation or needs. Please seek your own independent legal or financial advice before proceeding with any investment decision. The information is believed to be accurate at the time of compilation and is provided in good faith. Navigate does not warrant the accuracy or completeness of any information contributed by a third party. The information is subject to change without notice and Navigate is under no obligation to update the information. The information contained in this material are opinions of the author at the time of writing and does not constitute an offer, recommendation to act, a solicitation of an offer, or an inducement to subscribe for, purchase or sell any financial instrument or to enter a legally binding contract. This information, including any assumptions and conclusions is not intended to be a comprehensive statement of relevant practise or law that is often complex and can change. Past performance is not a reliable indicator of future performance. Any forecasts given in this material are predictive in character.

 

 

 

 

 

Disclaimer: The information contained in this email may provide general information. It does not have any regard to the financial situation or needs of any recipient(s) and must not be relied upon as financial product advice to any degree. You should consider seeking independent financial advice before making any decision based on this information. The information in this email and any opinions, conclusions or recommendations are reasonably held or made, based on the information available at the time of it being sent but no representation or warranty, either expressed or implied, is made or provided as to the accuracy, reliability or completeness of any statement made in this email.

The content of this email is confidential and intended for the recipient(s) specified in the message only. It is strictly forbidden to share any part or all of this message with any third party, without a written consent of the sender. If you received this message by mistake, please reply to this message and follow with its deletion, so that we can ensure only appropriate recipients receive our communications.

Disclaimer:This material is provided by Navigate Global Payments (Navigate) ACN 615 699 888, AFSL 502711.  The material contains general commentary only and does not constitute investment or any other advice.  Certain types of transactions, like futures, options and high yield securities can be risky, and not suitable for all investors.  This information has been prepared without considering your objectives, financial situation or needs.  Please seek your own independent legal or financial advice before proceeding with any investment decision. The information is believed to be accurate at the time of compilation and is provided in good faith.  Navigate does not warrant the accuracy or completeness of any information contributed by a third party. The information is subject to change without notice and Navigate is under no obligation to update the information. The information contained in this material are opinions of the author at the time of writing and does not constitute an offer, recommendation to act, a solicitation of an offer, or an inducement to subscribe for, purchase or sell any financial instrument or to enter a legally binding contract.  This information, including any assumptions and conclusions is not intended to be a comprehensive statement of relevant practise or law that is often complex and can change.  Past performance is not a reliable indicator of future performance. Any forecasts given in this material are predictive in character.

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Market Updates

Navigate Global Payments – Markets Today 22nd June 2022

 

MARKET WRAP 22nd June 2022

  • RBA Governor Lowe said Australians should be prepared for further interest rate increases and that level of rates is still very low for an economy with low unemployment and high inflation, and effectively ruled out a 75bps hike at the next meeting by noting expectations should be for a 25 or 50bps hike.

 

  • Additionally, there were RBA minutes which stated that members agreed further steps would need to be taken to normalize monetary conditions in the months ahead and the board remains committed to doing what is necessary to ensure inflation in Australia returns to the target.

 

  • Fed’s Barkin (2024 voter) said he supported a 75bps rate hike at the June meeting and noted that inflation is high and broad-based, while he added the Fed can get inflation back to 2% without breaking anything and that 50bps or 75bps range for the July meeting seems reasonable to him. Barkin open to 50 or 75bps hike in July and raising rates as fast as “feasible”

 

  • US stocks gained as participants returned from the holiday weekend to a broad risk-on mood with Wall Street partially atoning for last week’s worst weekly performance since March 2020.

 

  • AUD/USD gained traction on Tuesday and climbed toward 0.70. Economists at Rabobank expect the pair to edge higher towards the 0.73 by end-2022

 

  • “We expect AUD/USD can creep higher on a 12-month view based on Australia’s relatively sound economic outlook. However, the aussie is likely to be sensitive to risks regarding Chinese economic output and to broader concerns regarding slowing global growth.”

 

  • “We expect AUD/USD to hold close to current levels on a one-month view and rise moderately to the 0.73 area by year-end.”

 

  • Weekly Key Risk Events

• NZ – NZD Imports/Exports

• NZ – Trade Balance

• JP – BOJ Minutes of April Meeting

• UK – Core CPI y/y and CPI y/y

• UK – PPI and Retail Price Index

• CA – Core CPI y/y and CPI y/y

• CA – Bank of Canada SDG Rogers Holds Fireside Chat

• EU – Consumer Confidence

• US – Powell Delivers Semi-Annual Testimony Before Senate Panel

• US – Fed’s Evans Discusses Economic Outlook

 

Source FX Street

CURRENCY/INDICIES RANGES

Currency Pair Low High
AUD/USD 0.69345 0.6993
EUR/USD 1.0509 1.05825
GBP/USD 1.2243 1.23245
USD/JPY 134.94 136.68
NZD/USD 0.6318 0.63625
USD/CAD 1.2907 1.29825
USD/CNH 6.672 6.701
AUD/JPY 93.77 95.26
AUD/NZD 1.0971 1.1013
DXY 103.938 104.536

 

Equity Index Daily % Change Closing Level
ASX 1.4% 6524
SHANGHAI COMP -0.3% 3307
NIKKEI 1.8% 26246
FTSE 0.4% 7152
DAX 0.2% 13292
CAC 0.8% 5965
DOW JONES 2.1% 30530
S&P 500 2.4% 3765
NASDAQ 2.5% 11069
VIX -2.7% 30.19
Commodity Daily % Change Closing Level
CRUDE OIL 1.6% 109.8
ICE NAT GAS 2.5% 205.9
GOLD -0.3% 1833.4
SILVER -0.2% 21.7
SGX IRON ORE -0.8% 114.0
CMX COPPER 0.2% 403.7
ICE SUGAR 0.3% 18.8
ICE COTTON -3.8% 205.9
CBT WHEAT -5.5% 989.0
BITCOIN 2.2% 20879.7
Equity Index Daily % Change Closing Level
ASX 1.4% 6524
SHANGHAI COMP -0.3% 3307
     
Rates Markets Yield Daily Change
US 2 YEAR 3.19% 1.1
US 10 YEAR 3.28% 5.2
AUST 2 YEAR 3.15% -12.5
AUST 10 YEAR 4.06% -0.5

Source Bloomberg

   

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Disclaimer: This material is provided by Navigate Global Payments (Navigate) ACN 615 699 888, AFSL 502711. The material contains general commentary only and does not constitute investment or any other advice. Certain types of transactions, like futures, options and high yield securities can be risky, and not suitable for all investors. This information has been prepared without considering your objectives, financial situation or needs. Please seek your own independent legal or financial advice before proceeding with any investment decision. The information is believed to be accurate at the time of compilation and is provided in good faith. Navigate does not warrant the accuracy or completeness of any information contributed by a third party. The information is subject to change without notice and Navigate is under no obligation to update the information. The information contained in this material are opinions of the author at the time of writing and does not constitute an offer, recommendation to act, a solicitation of an offer, or an inducement to subscribe for, purchase or sell any financial instrument or to enter a legally binding contract. This information, including any assumptions and conclusions is not intended to be a comprehensive statement of relevant practise or law that is often complex and can change. Past performance is not a reliable indicator of future performance. Any forecasts given in this material are predictive in character.

 

 

 

 

Disclaimer: The information contained in this email may provide general information. It does not have any regard to the financial situation or needs of any recipient(s) and must not be relied upon as financial product advice to any degree. You should consider seeking independent financial advice before making any decision based on this information. The information in this email and any opinions, conclusions or recommendations are reasonably held or made, based on the information available at the time of it being sent but no representation or warranty, either expressed or implied, is made or provided as to the accuracy, reliability or completeness of any statement made in this email.

The content of this email is confidential and intended for the recipient(s) specified in the message only. It is strictly forbidden to share any part or all of this message with any third party, without a written consent of the sender. If you received this message by mistake, please reply to this message and follow with its deletion, so that we can ensure only appropriate recipients receive our communications.

Disclaimer:This material is provided by Navigate Global Payments (Navigate) ACN 615 699 888, AFSL 502711.  The material contains general commentary only and does not constitute investment or any other advice.  Certain types of transactions, like futures, options and high yield securities can be risky, and not suitable for all investors.  This information has been prepared without considering your objectives, financial situation or needs.  Please seek your own independent legal or financial advice before proceeding with any investment decision. The information is believed to be accurate at the time of compilation and is provided in good faith.  Navigate does not warrant the accuracy or completeness of any information contributed by a third party. The information is subject to change without notice and Navigate is under no obligation to update the information. The information contained in this material are opinions of the author at the time of writing and does not constitute an offer, recommendation to act, a solicitation of an offer, or an inducement to subscribe for, purchase or sell any financial instrument or to enter a legally binding contract.  This information, including any assumptions and conclusions is not intended to be a comprehensive statement of relevant practise or law that is often complex and can change.  Past performance is not a reliable indicator of future performance. Any forecasts given in this material are predictive in character.

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Market Updates

Navigate Global Payments – Markets Today 21st June 2022

 

MARKET WRAP – 21st June 2022

  • The AUD/USD retreated from its early high but retains gains and trades around 0.6950. Attention shifts to the Reserve Bank of Australia after the central bank surprised markets by hiking the cash rate by 50 bps to 0.85% in its June meeting.

 

  • European equities traded higher and US equity index futures also gained with price action steady amid the thinned liquidity conditions as US cash markets were closed for the Juneteenth holiday.

 

  • DXY softened but with price action contained in holiday-quietened trade, while EUR was slightly firmer as participants digested a slew of central bank rhetoric including from ECB’s Lagarde who expects to raise the key interest rates again in September after a 25bp hike in July and noted the calibration of the September hike will depend on the updated medium- term inflation outlook.

 

  • Fed’s Bullard (2022 voter) said he expects the economic expansion to continue this year and that the Fed must meet market expectations for rate hikes, while he added that effects of Fed guidance on the economy and CPI are taking hold.

 

  • Bullard also stated that high inflation has come up like a storm and the economy is slowing to the trend rate of growth, as well as noted that the current balance sheet reduction is a good place to begin with and they may not need to go as far on QT as it might seem, according to Reuters.

 

  • Equities rallied to end the week after a gruesome performance Monday-Thursday to see stocks still close lower for the sixth consecutive week. Gains were led by the Nasdaq, which was up over 4% at the highs underpinned by strong gains in Consumer Discretionary and Technology. All sectors closed in the green, with the “underperformers” being the defensive Health Care and Utility names, but still closed with gains above 1%. The broad equity upside saw the S&P 500 reclaim 4k.


TODAY’S KEY RISK EVENTS

  • In Australia, RBA Governor Lowe will speak today on the Economic Outlook and Monetary Policy just before the June RBA Board Minutes are released. Lowe is likely to reiterate the key message from his recent TV interview where he highlighted that emergency policy settings were no longer appropriate, and it is time to shift to more normal monetary policy settings.

 

  • Lowe noted that inflation is too high but does not need to be returned to target straight away. He also said that a cash rate of at least 2.5% would be ‘reasonable’ at some point.

 

  • Lowe will give his speech against the backdrop of high inflation, a tight labour market, rising wages growth and hawkish central banks globally. We expect a hawkish tone. The Bank will also release a Review of the Yield Target this morning.

 

 

CURRENCYI/NDICIES RANGES

Currency Pair Low High
AUD/USD 0.6927 0.6996
EUR/USD 1.047 1.0545
GBP/USD 1.22005 1.2277
USD/JPY 134.55 135.44
NZD/USD 0.6304 0.6362
USD/CAD 1.2978 1.3044
USD/CNH 6.6694 6.7162
AUD/JPY 93.16 94.35
AUD/NZD 1.0978 1.1005
DXY 104.234 104.821

 

Equity Index Daily % Change Closing Level
ASX -0.6% 6433
SHANGHAI COMP 0.0% 3315
NIKKEI -0.7% 25771
FTSE 1.5% 7122
DAX 1.1% 13266
CAC 0.6% 5920
DOW JONES closed 29889
S&P 500 closed 3675
NASDAQ closed 10798
VIX -0.3% 31.03
     
     
Commodity Daily % Change Closing Level
CRUDE OIL 0.6% 110.3
ICE NAT GAS -0.5% 200.8
GOLD 0.0% 1838.9
SILVER 0.2% 21.7
SGX IRON ORE 0.8% 111.9
CMX COPPER -0.2% 402.3
ICE SUGAR 0.3% 18.7
ICE COTTON -0.8% 200.8
CBT WHEAT -4.0% 1046.8
BITCOIN -1.9% 20207.4
     
     
Rates Markets Yield Daily Change
US 2 YEAR 3.18% 0.1
US 10 YEAR 3.23% 0.0
AUST 2 YEAR 3.27% -4.0
AUST 10 YEAR 4.07% -6.1

 

   

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Disclaimer: This material is provided by Navigate Global Payments (Navigate) ACN 615 699 888, AFSL 502711. The material contains general commentary only and does not constitute investment or any other advice. Certain types of transactions, like futures, options and high yield securities can be risky, and not suitable for all investors. This information has been prepared without considering your objectives, financial situation or needs. Please seek your own independent legal or financial advice before proceeding with any investment decision. The information is believed to be accurate at the time of compilation and is provided in good faith. Navigate does not warrant the accuracy or completeness of any information contributed by a third party. The information is subject to change without notice and Navigate is under no obligation to update the information. The information contained in this material are opinions of the author at the time of writing and does not constitute an offer, recommendation to act, a solicitation of an offer, or an inducement to subscribe for, purchase or sell any financial instrument or to enter a legally binding contract. This information, including any assumptions and conclusions is not intended to be a comprehensive statement of relevant practise or law that is often complex and can change. Past performance is not a reliable indicator of future performance. Any forecasts given in this material are predictive in character.

 

 

 

 

Disclaimer:This material is provided by Navigate Global Payments (Navigate) ACN 615 699 888, AFSL 502711.  The material contains general commentary only and does not constitute investment or any other advice.  Certain types of transactions, like futures, options and high yield securities can be risky, and not suitable for all investors.  This information has been prepared without considering your objectives, financial situation or needs.  Please seek your own independent legal or financial advice before proceeding with any investment decision. The information is believed to be accurate at the time of compilation and is provided in good faith.  Navigate does not warrant the accuracy or completeness of any information contributed by a third party. The information is subject to change without notice and Navigate is under no obligation to update the information. The information contained in this material are opinions of the author at the time of writing and does not constitute an offer, recommendation to act, a solicitation of an offer, or an inducement to subscribe for, purchase or sell any financial instrument or to enter a legally binding contract.  This information, including any assumptions and conclusions is not intended to be a comprehensive statement of relevant practise or law that is often complex and can change.  Past performance is not a reliable indicator of future performance. Any forecasts given in this material are predictive in character.

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Market Updates

Navigate Global Payments – Markets Today 20th June 2022

 

MARKET WRAP – 20th May 2022

 

  • The S&P 500 rose 0.22% and finished at 3,674.84, followed closely by the heavy-tech Nasdaq Composite, jumping 1.43% at 10,798.35. At the bottom of the pile is the Dow Jones Industrial Average, which slipped 0.13%, sitting at 29,888.78.

 

  • The Australian dollar prepares to finish the week with losses of almost 1.60%.
  • AUD/USD plummets from weekly highs reached on Thursday around 0.7069, down below the 0.7000 mark, after Wednesday’s afternoon Federal Reserve rate hike, which initially lifted the major to fresh weekly highs above 0.7000. However, Friday’s overall US Dollar strength brought the pair down. At 0.6930, the AUD/USD is down 1.58% and will finish the week with losses close to 1.58%.

 

  • In the meantime, the US Dollar Index rose after falling from a fresh 20-year high and sits around 104.650, up by 0.82%. US Treasury yields remain elevated but tumbled. The US 10-year note yields 3.231%, down seven basis points.

 

  • To recap, rates were lifted 75 bp vs the 50 bp flagged for June (and July) prior to hotter than forecast US CPI data that upped the ante and consensus in the absence of official commentary, while dots were plotted at a steeper gradient, though not as inclined as some anticipated. In the subsequent press conference, Chair Powell doused a few more flames by describing the % point move as uncommon and adding that next month’s hike could be 50 bp or the same magnitude, depending on the ongoing evolution of inflation.

 

  • The Fed blackout period is now over, with Bullard (2022 voter) the first to break silence saying the Fed has its credibility in check, although Kashkari (2023 voter) later gave more substance saying ‘ he would be in favour likely of 75bps in July, but called a 50bps strategy from there as more prudent’

 

  • Chair Powell spoke at a conference but gave said little of note, while George (2022 voter) explained her dissent for just a 50bps hike this week was based off her previously expressed over inverting the yield curve and not to be seen as making rash decisions.

 

  • In short, the Bank Of Japan maintained all of its ultra-easy settings and will continue JGB buying operations designed to defend the 10 year yield target with the additional offer to purchase CTD paper for an extended amount of time from June 20 (next Monday).  Conversely, the Swiss National Bank caught almost everyone out by raising rates 50bp and the reaction was reminiscent of January 2015 when the Eur/Chf peg was pulled, as the Bank also indicated a willingness to tighten further if necessary and President Jordan said the Franc is no longer deemed to be highly valued.

 

KEY RISK EVENTS Monday & Tuesday

Monday – US Public Holiday.

Tuesday

  • RBA Minutes The RBA will release minutes from the June meeting where the central bank hiked rates by 50bps to 0.85% (exp. 25bps increase) and noted that inflation in Australia has increased significantly, while it reiterated its commitment to doing what is necessary to ensure that inflation returns to the target over time.
  • The RBA also stated that inflation is likely to be higher than expected a month ago and that the Board expects to take further steps in normalising monetary conditions over the months ahead, with the size and timing of future interest rate increases to be guided by incoming data and the assessment of the outlook for inflation and the labour market. Furthermore, it noted that the Australian economy is resilient, although one source of uncertainty about the outlook is how household spending evolves, given the increasing pressure on finances from higher inflation
  • UK CPI Investec forecast headline CPI to remain at 9% and the core to slip to 6% from 6 .2% in April. But analysts expect a combination of former food costs, higher petrol prices and another s harp jump in the energy price cap in October to push inflation into double figures over the coming months. This time around, analysts at Investec (forecast an unchanged headline rate of 9%) suggest that food and energy will likely continue to place upward pressure on prices. However, this could be moderated this time around by clothing and footwear given the surge seen in May’21.

Source FX Street

        US Federal Reserve Dot Plot

Soruce Bloomberg

Currency ranges over Friday  

 

Currency Pair Low High
AUD/USD 0.68975 0.7051
EUR/USD 1.0445 1.056
GBP/USD 1.2174 1.2357
USD/JPY 132.165 135.42
NZD/USD 0.62695 0.6368
USD/CAD 1.2942 1.3079
USD/CNH 6.6946 6.7256
AUD/JPY 92.98 94.56
AUD/NZD 1.0989 1.1089
DXY 103.833 105.085

 

Stocks/Commodities at NY close Saturday

 

Equity Index Daily % Change Closing Level
ASX -1.8% 6475
SHANGHAI COMP 1.0% 3317
NIKKEI -1.8% 25963
FTSE -0.4% 7016
DAX 0.7% 13126
CAC -0.1% 5883
DOW JONES -0.1% 29889
S&P 500 0.2% 3675
NASDAQ 1.4% 10798
VIX -5.5% 31.13
Commodity Daily % Change Closing Level  
CRUDE OIL -6.8% 109.6  
ICE NAT GAS -13.6% 201.8  
GOLD -1.0% 1839.4  
SILVER -1.3% 21.7  
SGX IRON ORE -0.5% 119.4  
CMX COPPER -2.4% 403.0  
ICE SUGAR 0.3% 18.7  
ICE COTTON -0.8% 201.8  
CBT WHEAT -4.0% 1046.8  
BITCOIN -1.0% 20409.3  
 

 

Rates Markets Yield Daily Change
US 2 YEAR 3.18% 8.6
US 10 YEAR 3.23% 3.0
AUST 2 YEAR 3.31% 0.0
AUST 10 YEAR 4.13% 0.0

 

 Source Bloomberg

 

   

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Disclaimer: This material is provided by Navigate Global Payments (Navigate) ACN 615 699 888, AFSL 502711. The material contains general commentary only and does not constitute investment or any other advice. Certain types of transactions, like futures, options and high yield securities can be risky, and not suitable for all investors. This information has been prepared without considering your objectives, financial situation or needs. Please seek your own independent legal or financial advice before proceeding with any investment decision. The information is believed to be accurate at the time of compilation and is provided in good faith. Navigate does not warrant the accuracy or completeness of any information contributed by a third party. The information is subject to change without notice and Navigate is under no obligation to update the information. The information contained in this material are opinions of the author at the time of writing and does not constitute an offer, recommendation to act, a solicitation of an offer, or an inducement to subscribe for, purchase or sell any financial instrument or to enter a legally binding contract. This information, including any assumptions and conclusions is not intended to be a comprehensive statement of relevant practise or law that is often complex and can change. Past performance is not a reliable indicator of future performance. Any forecasts given in this material are predictive in character.

 

 

 

 

Disclaimer:This material is provided by Navigate Global Payments (Navigate) ACN 615 699 888, AFSL 502711.  The material contains general commentary only and does not constitute investment or any other advice.  Certain types of transactions, like futures, options and high yield securities can be risky, and not suitable for all investors.  This information has been prepared without considering your objectives, financial situation or needs.  Please seek your own independent legal or financial advice before proceeding with any investment decision. The information is believed to be accurate at the time of compilation and is provided in good faith.  Navigate does not warrant the accuracy or completeness of any information contributed by a third party. The information is subject to change without notice and Navigate is under no obligation to update the information. The information contained in this material are opinions of the author at the time of writing and does not constitute an offer, recommendation to act, a solicitation of an offer, or an inducement to subscribe for, purchase or sell any financial instrument or to enter a legally binding contract.  This information, including any assumptions and conclusions is not intended to be a comprehensive statement of relevant practise or law that is often complex and can change.  Past performance is not a reliable indicator of future performance. Any forecasts given in this material are predictive in character.