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Market Wrap – 19th July 2022

MARKET WRAP – 19th July 2022

  • U.S equites started the week poorly overnight with the NASDAQ closing -.8% while the Dow Jones and the S&P 500 both finished at -.7%.  U.S yields edged higher with the 10-year gaining 5bps to 2.97% while crude oil advanced 4.6% to $102.15 a barrel. Asian equity finished the session higher across the board while European equities opened higher with Euro Stoxx 50 +1.00%, FTSE100 +1.3% and DAX +1%. The ASX closed Monday’s session up 1.2% and Brent crude rose 2.1% to $103.30 a barrel.
  • We heard from BoE’s Saunders, who said further tightening remains likely in the coming months, adding that he doesn’t regard a bank rate of 2% or higher during next year as unlikely or implausible. Saunders said headline GDP growth looks to have slowed in Q2, however, it is harder to know for underlying growth. He commented that the UK government does not set ‘direction of travel’ for monetary policy. US’s Yellen hit the wires, saying she wants to eliminate ‘undue dependence’ on China for rare earths and certain goods.
  • US NAHB Housing Market Index for July fell to 55, down from 67 and below expectations of 65 with the result the second largest decline on record. In geo-political news, Russian gas company Gazprom retroactively declared force majeure on several European gas buyers amidst uncertainty around the re-opening of the main pipeline into Europe, scheduled for later this week.
  • Today’s RBA minutes will be closely watched but investors are likely to be more focussed on tomorrow’s speech from RBA Governor Lowe which is titled “Inflation, Productivity and the Future of Money “– at The Australian Strategic Business Forum.

 FX

  • The AUD/USD closed yesterday at .6712 after trading in a .6792/.6853 range and spent the Asian session climbing to finish the session at 0.6836
  • The US dollar was largely weaker into the London Lunch period and AUD/USD made new daily highs of 0.68425. NZD/USD climbed from 0.6148 to trade back above 0.6180. EUR/USD climbed sharply to 1.01745 highs. GBP/USD followed suit making 1.1992 highs. USD/JPY traded around 138.20. USD/CAD continued to edge lower making 1.29645 lows.
  • The weak US data combined with offering interest into the London rate set which saw the USD continue to sell off over the NY morning. AUD/USD moved to highs above 0.6850 while EUR/USD reached 1.0202 and GBP/USD moved up through 1.2000 to see highs of 1.2032. USD/CAD falling below 1.2900 in the move, supported by 4% gains for crude oil.
  • Once London fix flows had passed, the USD sell-off halted with the greenback steadily recovering over the NY afternoon. The local unit fell back to the 0.6810 area ahead of the Sydney open and sits at .6812 at the time of writing.

CURRENCYI/INDICIES RANGES

Currency Pair Low High
AUD/USD 0.6792 0.6853
EUR/USD 1.008 1.0202
GBP/USD 1.1864 1.2032
USD/JPY 137.895 138.53
NZD/USD 0.6148 0.62
USD/CAD 1.28985 1.3024
USD/CNH 6.7364 6.7635
AUD/JPY 93.85 94.63
AUD/NZD 1.0996 1.1082
DXY 106.892 108.036

Source Bloomberg

Equity Index Daily % Change Closing Level
ASX 1.2% 6687
SHANGHAI COMP 1.6% 3278
NIKKEI 0.5% 26788
FTSE 0.9% 7223
DAX 0.7% 12960
CAC 0.9% 6092
DOW JONES -0.7% 31073
S&P 500 -0.8% 3831
NASDAQ -0.8% 11360
VIX 5.1% 25.46
     
     
Commodity Daily % Change Closing Level
CRUDE OIL 4.7% 102.2
ICE NAT GAS -3.3% 193.7
GOLD -0.2% 1708.7
SILVER -1.1% 18.7
SGX IRON ORE 1.7% 102.4
CMX COPPER 2.5% 331.4
ICE SUGAR 0.8% 19.4
ICE COTTON 4.8% 193.7
CBT WHEAT 4.0% 807.8
BITCOIN -2.6% 21616.7
     
     
Rates Markets Yield Daily Change
US 2 YEAR 3.17% 4.7
US 10 YEAR 2.98% 6.3
AUST 2 YEAR 2.66% 8.2
AUST 10 YEAR 3.44% 2.9

Source Bloomberg

 

 

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