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Market Wrap – 30 May 2022

Wall St finished the week on a positive note with the NASDAQ posting gains of 3.3% while the S&P 500 closed 2.5% higher.  US yields were unchanged while oil made minor gains to close at $115.10 a barrel.  AUD/USD traded in a 0.7090/.71675 before closing at 0.7167.

Asian equities finished the session higher on Friday, with the Hang Seng up 2.2% and Nikkei +0.7%. The ASX gained 1.1% lifted by energy and consumer discretion stocks. European equities climbed on the open, with the FTSE 100 up 0.12% and CAC +0.8%. US 10-year treasuries moved lower to 2.73% and Oil fell back to $113.71 a barrel.

Into the NY morning and US Core PCE for April printed at 0.3% MoM and 4.9% YoY with both matching expectations. Personal Income was 0.4% compared to expectations of 0.5% while Personal Spending was 0.9% compared to expectations of 0.8%. Released a little later, the May University of Michigan Sentiment Survey was revised down to 58.4 from 59.1 with downward revisions to the Expectations and Current Conditions sub-indices.

FX

Limited movement over the European morning with the antipodeans modestly firmer as the local unit made highs above 0.7150 while NZD/USD made 0.6531 highs. EUR/USD and GBP/USD weakened with the single currency briefly falling to lows under 1.0700 ahead of the NY session while the pound fell to 1.2586  lows though both quickly recovered.

Little reaction to the US data points but with Wall St opening firmly and pushing higher over the NY morning, the USD was modestly sold. AUD/USD briefly traded up to 0.71675 highs with NZD/USD up to 0.6548 while USD/CAD fell to 1.2728. EUR/USD and GBP/USD returned to mid-range on the day though USD/JPY remained on the sidelines, trading either side of 127.00.

Little movement amongst the majors over a quiet NY afternoon. USD/CAD provided the lone exception as it fell to new lows under 1.2720 in late trade though the antipodeans both closed within sight of their earlier highs while EUR/USD, GBP/USD and USD/JPY were all near mid-range on the day as the week ended. AUD/USD closed the week on its high of 0.71675 after earlier trading at a low 0.7090.  Further offering interest is expected ahead of 0.7200 while demand has followed spot higher to rest between 0.7050/.7100.

TODAY’S KEY RISK EVENTS

A quiet day before a relatively busy week ahead.  In the U.S, we get the Federal Reserve’s Beige Book on Wednesday, Non-farm payrolls on Friday along with Several FOMC participants making public remarks throughout the week.

In Australia, GDP is due on Wednesday along with a raft of housing-related indicators, including building approvals (Tuesday), RBA credit data (Tuesday) and lending finance (Friday). CoreLogic’s housing price data for May on Wednesday is likely to show a further slowing in national dwelling price growth, with daily figures currently showing a decline in the 5-capital city measure. Sydney housing prices are on track for the fourth consecutive monthly decline.

CURRENCY/INDICIES RANGES

Currency Pair Low High
AUD/USD 0.7090 0.7167
EUR/USD 1.0697 1.0765
GBP/USD 1.2586 1.2666
USD/JPY 126.67 127.30
NZD/USD 0.6471 0.6548
USD/CAD 1.2717 1.2783
USD/CNH 6.7070 6.7849
AUD/JPY 89.96 91.01
AUD/NZD 1.0937 1.0964
DXY 101.433 101.93

Source – Bloomberg

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