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Markets Today – 4th July 2022

 

MARKET WRAP – 4th July 2022

  • AUD/USD nose-dived to fresh YTD lows near 0.67633 after harmful US manufacturing data, thought as the New York session progressed has recovered some ground, and is closing to the 0.6800 figure. AUD/USD stays depressed finished the week with substantial losses of 2%.

 

  • US equity benchmarks were higher in the first session of the third quarter following Thursday’s slump that ended the worst first half of the year seen in decades.

 

  • Government bond yields continued a downward trajectory Friday as a closely monitored manufacturing gauge fell to its lowest level in two years in June.

 

  • The Dow Jones Industrial Average rose 1.1% to 31,097.26, the S&P 500 was also up by 1.1% to 3,825.33, and the Nasdaq Composite was nearly 1% higher at 11,127.85.  For the week, the Dow was 1.3% lower, the S&P 500 dropped 2.2%, and the Nasdaq slumped 4%.

 

  • The Institute for Supply Management’s US manufacturing index fell to 53 from 56.1 in May, compared with expectations of 54.5 in a survey compiled by Bloomberg. ISM said Friday the headline reading, while still in expansionary territory, is the weakest since June 2020, when the world was in the throes of the COVID-19 pandemic.

 

  • The US 10-year yield dropped 8.5 basis points to 2.89%.

 

  • Oil prices surged, with front-month global benchmarks Brent crude and West Texas Intermediate crude each up around 2%, amid ongoing and expected supply disruptions in Libya and Norway.

 

FX

  • DXY resumes the upside and reclaims the area beyond 105.00 the figure at the end of the week, managing well to keep the trade in the 2-week highs zone.

 

  • EUR/USD was down some 0.5% on Friday due to the pick-up in pessimism about the global economic outlook.  The US dollar has found its feet yet again due to the demand for the safe-haven currency. The euro fell to a low of 1.0365 vs the greenback from a high close to the 1.05 area.

 

  • GBP/USD has lost its traction and declined toward 1.2100 after having registered modest gains on Thursday.  The pair remains technically bearish in the short term and it is likely to extend its slide unless there is a convincing improvement in risk mood.

 

  • USD/JPY witnessed selling for the second successive day and dropped closer to the weekly low. The overnight break through an ascending trend-line and 200-hour SMA favours bearish traders.  Mixed technical indicators warrant some caution before confirming a near-term top for the pair.


                               TODAY’S KEY RISK EVENTS

  • Most of the key risk events will take place later in the week as America celebrates Independence Day.  Trade Balance in Germany and building permits locally will provide some insight into the strength of the economy.

 

 

                                                                                                          

CURRENCY/INDICIES RANGES

Currency Pair Low High
AUD/USD 0.6764 0.6902
EUR/USD 1.0366 1.0486
GBP/USD 1.1976 1.21725
USD/JPY 134.75 135.99
NZD/USD 0.6150 0.6243
USD/CAD 1.2867 1.29665
USD/CNH 6.6957 6.7270
AUD/JPY 91.37 93.79
AUD/NZD 1.0968 1.1060
DXY 104.742 105.635

 

Equity Index Daily % Change Closing Level
ASX -0.4% 6540
SHANGHAI COMP -0.3% 3388
NIKKEI -1.7% 25936
FTSE 0.0% 7169
DAX 0.2% 12813
CAC 0.1% 5931
DOW JONES 1.0% 31097
S&P 500 1.1% 3825
NASDAQ 0.9% 11128
VIX -6.8% 26.77
Commodity Daily % Change Closing Level
CRUDE OIL 2.5% 108.4
ICE NAT GAS -3.0% 240.9
GOLD 0.0% 1807.8
SILVER -2.0% 19.9
SGX IRON ORE -1.0% 113.5
CMX COPPER -2.5% 361.9
ICE SUGAR -2.3% 18.1
ICE COTTON -1.4% 97.5
CBT WHEAT -4.9% 841.0
BITCOIN 4.0% 19480.0
Rates Markets Yield Daily Change
US 2 YEAR 2.83% -12.2
US 10 YEAR 2.88% -13.4
AUST 2 YEAR 2.49% -13.8
AUST 10 YEAR 3.60% -6.5

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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