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Markets Today 14th June 2022

MARKET WRAP – 14th June 2022

  • The AUD/USD pair trades at its lowest in over a month and nears 0.6900 as speculative interest rushes away from high-yielding assets.  Soaring US inflation spurred fears the US central bank will take even more aggressive measures this week.

 

  • The Dow Jones Industrial Average fell 2.8% to 30,516.74, while the S&P 500 declined by 3.9% to 3,749.63. The Nasdaq Composite sank 4.7% at 10,809.23. The S&P 500 is now down more than 20% from its high on Jan. 3.

 

  • The spread between Italian and German 10-year Bond yields hit the widest since May 2020 at 236.9bps, up 5 on the day. German 2-year yields climbed above 1% for the first time since 2011. Bitcoin slide below $25,000 to the lowest in 18 months.

 

  • The US 10-year yield advanced 21 basis points to 3.35% ahead of the two-day Federal Reserve meeting that begins Tuesday.  West Texas Intermediate crude oil futures were down 0.42% to $120.16 a barrel.  Gold was down $53.70 to $1,821.80 per troy ounce.

 

  • Data released Friday by the Bureau of Labor Statistics showed the US Consumer Price Index soared 8.6% year-on-year in May, the highest level since December 1981, fueling fears the Federal Reserve will act aggressively to tighten monetary policy.

 

 

FX

  • The US dollar index (DXY) is advancing sharply higher as soaring price pressures have infused fresh blood into the asset.  With discussion around a .50, .75 or even as high as a 100-basis point hike from the Federal Reserve.

 

  • The EUR/USD pair is under renewed selling pressure as the day ends amid lingering risk aversion. Stocks collapsed as market rumours hint at the US Federal Reserve raising rates by 75 bps rather than the 50 bps planned.  EUR/USD trading currently trading at 1.04.

 

  • GBP/USD remains under pressure, despite the bleeding paused. The broad-based dollar strength on risk-aversion and the disappointing data releases from the UK force the pair to stay on the back foot at the start of the week.
  • USD/JPY corrects further towards 134.00 on Japanese verbal intervention. The US dollar, Treasury yields showcase unrelenting strength on recession fears. All eyes shift towards the Fed and BOJ for a fresh trading impulse in the pair.

 


                               TODAY’S KEY RISK EVENTS

  • All eyes will be on the GBP as unemployment numbers are announced at 4pm today.  German inflation data will also be in focus as the European Central Bank begin to adjust their monetary policy decision.

 

                                                                                                          

CURRENCY/INDICIES RANGES

Currency Pair Low High
AUD/USD 0.6911 0.7072
EUR/USD 1.0404 1.052
GBP/USD 1.2109 1.2325
USD/JPY 133.595 135.22
NZD/USD 0.6248 0.635
USD/CAD 1.2775 1.2897
USD/CNH 6.74 6.7855
AUD/JPY 92.58 94.97
AUD/NZD 1.1063 1.1094
DXY 104.208 105.285

 

Equity Index Daily % Change Closing Level
ASX -1.3% 6932
SHANGHAI COMP -0.9% 3256
NIKKEI -3.0% 26987
FTSE -1.5% 7206
DAX -2.4% 13427
CAC -2.7% 6022
DOW JONES -2.8% 30517
S&P 500 -3.9% 3750
NASDAQ -4.7% 10809
VIX 23.1% 34.16
 
     
Commodity Daily % Change Closing Level
CRUDE OIL 0.2% 120.9
ICE NAT GAS 5.1% 153.7
GOLD -0.5% 1819.5
SILVER -0.7% 21.1
SGX IRON ORE -0.4% 134.0
CMX COPPER -2.2% 421.6
ICE SUGAR -1.1% 18.9
ICE COTTON 0.4% 153.7
CBT WHEAT -0.2% 1082.8
BITCOIN -0.8% 23516.1
 
     
Rates Markets Yield Daily Change
US 2 YEAR 3.36% 29.1
US 10 YEAR 3.38% 21.8
AUST 2 YEAR 2.75% 1.3
AUST 10 YEAR 3.67% 6.7

Source – Bloomberg

   

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Disclaimer:This material is provided by Navigate Global Payments (Navigate) ACN 615 699 888, AFSL 502711.  The material contains general commentary only and does not constitute investment or any other advice.  Certain types of transactions, like futures, options and high yield securities can be risky, and not suitable for all investors.  This information has been prepared without considering your objectives, financial situation or needs.  Please seek your own independent legal or financial advice before proceeding with any investment decision. The information is believed to be accurate at the time of compilation and is provided in good faith.  Navigate does not warrant the accuracy or completeness of any information contributed by a third party. The information is subject to change without notice and Navigate is under no obligation to update the information. The information contained in this material are opinions of the author at the time of writing and does not constitute an offer, recommendation to act, a solicitation of an offer, or an inducement to subscribe for, purchase or sell any financial instrument or to enter a legally binding contract.  This information, including any assumptions and conclusions is not intended to be a comprehensive statement of relevant practise or law that is often complex and can change.  Past performance is not a reliable indicator of future performance. Any forecasts given in this material are predictive in character.

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