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Markets Today – 6th July 2022

 

MARKET WRAP – 6th July 2022

  • The AUD/USD pair bounced from its lowest since June 2020, now struggling to recover the 0.6800 threshold. Wall Street managed to trim most of its early losses, putting a halt to the USD rally.

 

  • The Dow Jones Industrial Average dropped 0.4% to 30,967.45, the S&P 500 edged up 0.2% to 3,831.59, and the Nasdaq Composite was 1.8% higher at 11,322.24.

 

  • The US 10-year yield plunged 6.9 basis points to 2.84%, reaching levels not seen since the end of May.

 

  • • Asian equities finished largely higher with the CSI300 underperforming its peers down -0.15%. The ASX was up 0.25% on Tuesday’s close, after the RBA raised rates 0.5% as expected to 1.35%.

 

  • • European equities opened higher with Eurostoxx 50 +0.7% and FTSE100 +0.4%. The yield on 10-year US Treasuries was little changed at 2.88%. Brent crude slipped below $113 per barrel. Bitcoin fell below $20,000.

 

  • In the US, May Factory Orders rose 1.6% MoM to beat forecasts of a 0.5% increase while Durable Goods Orders were revised up to 0.8% from an initial reading of 0.7%.

 

FX

  • DXY picks up extra pace and surpasses the 106.00 yardstick to print new cycle tops on Tuesday.  A fresh 20-year high was reached as the 107 DXY level was tested.

 

  • The EUR/USD pair collapsed amid fears of an EU recession, an energy crisis. Rush to safety benefited the greenback, which holds on to gains despite Wall Street trimming part of its early losses.

 

  • GBP/USD touched its weakest level since March 2020 near 1.1900 in the American session on Tuesday on relentless dollar strength. The Pound is further weighed by turmoil in Downing Street. Two senior cabinet ministers have just resigned, Sajid Javid and Rishi Sunak, jeopardizing Boris Johnson’s mandate.

 

  • USD/JPY gained traction for the second straight day, though the intraday uptick ran out of steam.  A turnaround in the risk sentiment benefitted the safe-haven JPY and capped the upside for the pair. The Fed-BoJ policy divergence should limit the downside ahead of the FOMC minutes on Wednesday.


                                          TODAY’S KEY RISK EVENTS

  • The FOMC will release the meeting minutes from their mid-June meeting today, which will provide further insight into the rationale underpinning the decision to hike the Fed funds rate by 75bps.  We expect more volatility for AUD and major currencies in overnight trading.

                                                                                                          

CURRENCY/INDICIES RANGES

Currency Pair           Low          High
AUD/USD 0.6762 0.6895
EUR/USD 1.0236 1.0449
GBP/USD 1.1899 1.21255
USD/JPY 135.52 136.365
NZD/USD 0.6125 0.62265
USD/CAD 1.28435 1.30845
USD/CNH 6.6822 6.7243
AUD/JPY 91.69 93.98
AUD/NZD 1.1014 1.1076
DXY 105.051 106.792

 

Equity Index Daily % Change Closing Level
ASX 0.3% 6629
SHANGHAI COMP 0.0% 3404
NIKKEI 1.0% 26423
FTSE -2.9% 7025
DAX -2.9% 12401
CAC -2.7% 5795
DOW JONES -0.4% 30968
S&P 500 0.2% 3831
NASDAQ 1.7% 11322
VIX 0.0% 27.54
 
     
Commodity Daily % Change Closing Level
CRUDE OIL -8.1% 99.7
ICE NAT GAS 2.9% 290.4
GOLD -2.3% 1765.9
SILVER -3.8% 19.2
SGX IRON ORE -3.3% 108.8
CMX COPPER -4.7% 343.5
ICE SUGAR -1.5% 17.8
ICE COTTON -4.1% 290.4
CBT WHEAT -4.9% 804.8
BITCOIN 4.0% 20537.2
 
     
Rates Markets Yield Daily Change
US 2 YEAR 2.82% -1.5
US 10 YEAR 2.81% -6.8
AUST 2 YEAR 2.48% 2.5
AUST 10 YEAR 3.55% -1.2

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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