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Market Wrap – 21st July 2022

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.

FX

  • 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.

CURRENCYI/INDICIES RANGES

Currency Pair Low High
AUD/USD 0.6873 0.6930
EUR/USD 1.0156 1.0273
GBP/USD 1.1953 1.2034
USD/JPY 137.91 138.38
NZD/USD 0.6219 0.6272
USD/CAD 1.2855 1.2906
USD/CNH 6.7398 6.7765
AUD/JPY 94.98 95.75
AUD/NZD 1.104 1.1084
DXY 106.39 107.25

Source Bloomberg

Equity Index Daily % Change Closing Level
ASX 1.6% 6759
SHANGHAI COMP 0.8% 3305
NIKKEI 2.7% 27680
FTSE -0.4% 7264
DAX -0.2% 13282
CAC -0.3% 6185
DOW JONES 0.2% 31875
S&P 500 0.6% 3962
NASDAQ 1.6% 11898
VIX -2.7% 23.85
Commodity Daily % Change Closing Level
CRUDE OIL -1.9% 102.3
ICE NAT GAS 23.9% 268.3
GOLD -0.5% 1695.0
SILVER -0.6% 18.7
SGX IRON ORE -0.7% 99.5
CMX COPPER 0.7% 331.4
ICE SUGAR -0.9% 18.7
ICE COTTON 0.5% 268.3
CBT WHEAT 1.4% 823.3
BITCOIN -1.8% 23261.5
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

Source Bloomberg

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