MARKET WRAP – 21st July 2022
- Another positive session on Wall St overnight with the NASDAQ closing +1.6%, the S&P 500 +0.5% and the Dow Jones +0.2%. US yields were flat while crude oil closed -1.8% at $102.20 a barrel. The USD regained some lost ground which saw the EUR/USD close at 1.0180 while the AUD/USD finished the session at 0.6885. Asian equities finished the session higher across the board, with the Nikkei the top performer up 2.7%. The ASX closed Wednesdays session +1.7%, reaching a 5-week high. European equities opened higher with Euro Stoxx +0.5%, FTSE100 +0.65% and DAX +0.7%. 3-month Euribor jumped 8.3bps, the biggest increase since 2008
- In the UK, June CPI rose to 9.4% y/y beating estimates of 9.3%, the core measure rose to 5.8% y/y, in line with expectations. German June Producer prices rose 0.6% m/m, missing expectations of +1.5% while Canadian CPI climbed by 8.1%. Both UK and Canadian CPI both up from May figures. Russian Foreign Minister Lavrov saying that if the West delivered long-range weapons to Ukraine, then Russia’s geographical objectives of its “special operation” in Ukraine would be expanded further.
- In the US, June Existing Home Sales declined by 5.4% to 5.12m to fall short of expectations of a 1.1% decline to 5.35m. EU Consumer Confidence for July fell to -27.0, down from -23.8 and worse than expectations of -24.9. Little reaction to the data however the local unit drifted down to lows of 0.68835 before recovering. Elsewhere and Wall St was a little mixed though generally weaker in early trade before recovering back to flat.
- EUR/USD rose to a new 2-week high at 1.02730, up 0.5% on the day on suggestions that Italian PM Draghi would be able to stay in power and form a new coalition. However, EURUSD fell back towards 1.0220.
- EUR/USD was quickly lower on the Russian headline, falling to new lows of 1.0173 while European equities slipped into the red. Elsewhere and AUD/USD fell from 0.69305 highs to trade below 0.6900 while NZD/USD dipped towards 0.6240 and GBP/USD declined to lows of 1.1956. USD/JPY was little changed, holding just above 138.00 while USD/CAD bounced from lows of 1.2855 to highs above 1.2890 ahead of the release of inflation data.
- AUD/USD fell to new lows of 0.6873 while NZD/USD fell to 0.62195 and GBP/USD dipped to 1.19535. AUD/USD traded in a 0.6873/.69305 range with all key levels remaining intact. Demand is expected ahead of 0.6790 while 0.6950 should provide the next meaningful level of resistance.
|Equity Index||Daily % Change||Closing Level|
|Commodity||Daily % Change||Closing Level|
|ICE NAT GAS||23.9%||268.3|
|SGX IRON ORE||-0.7%||99.5|
|Rates Markets||Yield||Daily Change|
|US 2 YEAR||3.25%||0.9|
|US 10 YEAR||3.03%||0.9|
|AUST 2 YEAR||2.82%||5.8|
|AUST 10 YEAR||3.54%||3.5|