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Markets Today – 5th July 2022

 

MARKET WRAP – 5th July 2022

  • The AUD/USD pair recovered 100 pips from the 2-year low posted on Friday, holding on to gains and trading at around 0.6860. Market players are on hold ahead of the RBA monetary policy decision.

 

  • US equity benchmarks did not trade in observance of Independence Day.

 

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

 

  • Asian equities were mixed on Monday with the Nikkei +0.8% while the Hang Seng fell 0.1%. The ASX closed 1.1% higher, driven by gains in energy and real estate. AUD/USD climbed modestly during the day, from a low of 0.6796, reaching 0.6855 later in the session.

 

  • European equities opened with gains, with the FTSE climbing 0.9% and CAC up 0.7%. WTI Crude fell back slightly towards 107.93.

 

  • Euro-area May PPI came in slightly below expectations, rising 0.7% m/m (consensus +0.9%) and 36.3% y/y (+36.6%). The ECB said they are to tilt corporate bond holdings to reflect climate risk. Meanwhile the ECB’s Vasle said there will likely be more hikes in 4Q after September.

 

 

FX

  • DXY faces some moderate selling pressure and breaks below the 105.00 support at the beginning of the week.  Light volume to begin the week with no key risk events taking place yesterday.

 

  • EUR/USD trades around 1.0420 with a negative bias, as risk aversion undermines demand for the shared currency. EU inflation-related data and gas shortages add to the sour tone of the pair.

 

  • GBP/USD has reversed its direction in the second half of the day and erased a large portion of its daily gains. The pair trades within a touching distance of 1.2100 as the US Dollar Index holds above 105.00 despite subdued trading action.

 

  • USD/JPY bulls eye a move towards 136.20 and a touch higher even.  The price is making a double top on the daily chart and the bearish engulfing candle followed by a subsequent drive into the demand structure could be the foundation for a significant bearish correction in the coming days.


                                TODAY’S KEY RISK EVENTS

  • All eyes will be on Governor Lowe today as he announces the RBA’s interest rate decision.  Expectations are for a .50 basis point hike.

 

 

                                                                                                          

CURRENCY/INDICIES RANGES

Currency Pair Low High
AUD/USD 0.6796 0.68875
EUR/USD 1.0418 1.04625
GBP/USD 1.20895 1.2164
USD/JPY 134.795 135.77
NZD/USD 0.6197 0.6251
USD/CAD 1.2838 1.2903
USD/CNH 6.681 6.7072
AUD/JPY 91.56 93.28
AUD/NZD 1.0965 1.1055
DXY 104.815 105.252

 

Equity Index Daily % Change Closing Level
ASX 1.1% 6613
SHANGHAI COMP 0.5% 3405
NIKKEI 0.8% 26154
FTSE 0.9% 7233
DAX -0.3% 12773
CAC 0.4% 5955
DOW JONES 1.0% 31097
S&P 500 1.1% 3825
NASDAQ 0.9% 11128
VIX 3.1% 27.53
Commodity Daily % Change Closing Level
CRUDE OIL 2.1% 110.7
ICE NAT GAS 17.1% 282.2
GOLD 0.3% 1816.5
SILVER 0.6% 20.0
SGX IRON ORE 2.8% 111.8
CMX COPPER -1.0% 356.7
ICE SUGAR -2.3% 18.1
ICE COTTON -1.4% 282.2
CBT WHEAT -4.3% 846.0
BITCOIN 1.7% 19756.7
Rates Markets Yield Daily Change
US 2 YEAR 2.83% 0.0
US 10 YEAR 2.88% 0.0
AUST 2 YEAR 2.46% -3.3
AUST 10 YEAR 3.56% -3.5

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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