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Market Wrap – 18th July 2022

MARKET WRAP – 18th July 2022

  • Over the weekend Wall St rallied with the Dow Jones closing +2.1%, the NASDAQ +1.9% and the S&P 500 +1.8% while U.S yields ended the day slightly lower. Crude oil climbed 1.8% but remained under $100 a barrel while iron ore finished the session +2.8%. The USD was generally softer which saw the AUD close near its high at .6793. The ASX fell 0.7% on Friday’s close, led by worries about falling commodity prices and weaker-than-expected Chinese Q2 GDP.
  • US Retail Sales for June printed at +1.0%, up from a positively revised -0.1% and better than expectations of 0.9% with core measures also beating expectations. The USD recovered very briefly on the release though this was quickly undermined as Fed commentary seemingly indicating that a 75bp hike was coming in July. Governor Waller said that a 75bp hike was his base case while Bostic said that a 75bp hike was a big move, that moving too dramatically could have negative effects and that policy transition needs to be orderly.
  • The University of Michigan Sentiment Survey for July printed at 51.1, up from and better than expectations of 50.0 with better-than-expected results for Expectations and Current Conditions Adding to the pressure on the USD however, 1 year inflation expectations printed at 5.2% against expectations of 5.3% while 5–10-year inflation expectations printed at 2.8%, down from 3.1% and below expectations of 3.0%.

FX

  • AUD/USD traded to 0.67645 highs early in the session on Friday night, to then fall to finish at 0.6720 lows after a brief look at 0.6700.
  • The data in the US saw US yields and the greenback weaken into the London rate set with the local unit moving up through 0.6800 to hit highs of 0.68065. NZD/USD hit highs of 0.6177 with EUR/USD and GBP/USD up to 1.0088 and 1.1872, respectively. USD/CAD fell to lows of 1.3014 while USD/JPY slipped to lows of 138.385.
  • Into the NY afternoon and it was a quiet end to the week with currencies settling into small ranges generally near their respective highs against the greenback. EUR/USD pushed marginally higher to fall just short of 1.0100 while the local unit settled near 0.6790 as the week ended.
  • The AUD/USD opens this morning at 0.6790.

CURRENCYI/INDICIES RANGES

Currency Pair Low High
AUD/USD 0.6720 0.68065
EUR/USD 1.0007 1.0098
GBP/USD 1.1805 1.1872
USD/JPY 138.385 139.13
NZD/USD 0.6121 0.6177
USD/CAD 1.3014 1.3135
USD/CNH 6.7483 6.7841
AUD/JPY 93.12 94.26
AUD/NZD 1.0978 1.1041
DXY 107.912 108.712

Source Bloomberg

Equity Index Daily % Change Closing Level
ASX -0.7% 6606
SHANGHAI COMP -1.6% 3228
NIKKEI 0.5% 26788
FTSE 1.7% 7159
DAX 2.8% 12865
CAC 2.0% 6036
DOW JONES 2.1% 31288
S&P 500 1.9% 3863
NASDAQ 1.8% 11452
VIX -8.2% 24.23
     
     
Commodity Daily % Change Closing Level
CRUDE OIL 1.8% 97.5
ICE NAT GAS -15.4% 200.3
GOLD -0.2% 1706.8
SILVER 1.5% 18.7
SGX IRON ORE 2.8% 99.2
CMX COPPER 0.9% 324.2
ICE SUGAR 1.5% 19.3
ICE COTTON 6.0% 88.7
CBT WHEAT -1.8% 781.0
BITCOIN 1.3% 20935.2
     
     
Rates Markets Yield Daily Change
US 2 YEAR 3.13% -0.2
US 10 YEAR 2.93% -3.3
AUST 2 YEAR 2.58% -1.3
AUST 10 YEAR 3.41% -0.4

Source Bloomberg

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