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Markets Today – 7th July 2022

 

MARKET WRAP – 7th July 2022

  • The AUD/USD pair seesaws between gains and losses but maintains the overall bearish trend in a risk-averse environment sitting at .6780.  Wall Street saved the day once again as US indexes got to bounce ahead of the close, preventing the pair from breaking lower.

 

  • The Dow Jones Industrial Average gained 0.2% to 31,037.68, the S&P 500 was up 0.4% to 3,845.08, and the Nasdaq Composite was 0.4% higher at 11,361.85.

 

  • The Fed minutes showed that almost all officials backed a 75bp hike at the June meeting with a view that another 50bp to 75bp move was likely.  Officials were also described as being “highly attentive” to inflation with concerns that if inflation expectations became unanchored then it would be more difficult and more costly to bring inflation back to target.

 

  • The US 10-year yield jumped 11.7 basis points to 2.93%.

 

  • Asian equities closed in the red across the board, with the Hang Seng the worst performer down 1.5%.  The ASX fell 0.5% on Wednesdays close, led by a 5.8% fall in the energy sector.

 

  • European equities opened largely higher with Eurostoxx 50 +1.8% and FTSE100 +1.6%.

 

  • US Services PMI for June was confirmed at 52.7, revised up from 51.6 with the Composite PMI revised up to 52.3 from 51.2. Released shortly afterwards, ISM Services for June printed at 55.3, down from 55.9 though well above expectations of 54.0.

 

  • BOE’s Hill commented that MPC are finely balanced in August and beyond, adding that the BOE is willing to act faster on tightening if it is needed.  He continued by saying unanimity about the short-term interest rate outlook no longer exists on MPC.  Pill said he thinks inflation expectations remain ‘anchored’, while he expects the UK to slow with no growth next year.

 

FX

  • DXY adds to the ongoing sharp uptick and leaves behind the 107.00 yardstick on Wednesday, reaching new YTD highs.

 

  • EUR/USD bottomed at a fresh two-decade low of 1.0160 on Tuesday, bouncing afterwards but holding below 1.0200. FOMC Minutes showed US policymakers are willing to become more restrictive if inflation persists. Growth forecast downwardly revised for this year and the next.

 

  • GBP/USD has bounced modestly from its intraday lows, maintaining the red. The dollar remains strong amid fears of a global recession, while the Pound suffers from a UK Government crisis after multiple cabinet members resigned.

 

  • USD/JPY edged lower on Wednesday, though lacked any follow-through selling. The USD surged to a fresh 20-year high and extended some support to the pair. A positive risk tone undermined the safe-haven JPY and also helped limit losses.

 


                                                    TODAY’S KEY RISK EVENTS

  • Aussie trade, import and export data will be in focus today.  US Employment numbers for the month of June will be released prior to market open.  We expect volatility in AUD after numbers are released for of both events.

                                                                                                          

CURRENCY/INDICIES RANGES

Currency Pair             Low          High
AUD/USD 0.67615 0.6825
EUR/USD 1.01615 1.0277
GBP/USD 1.1877 1.199
USD/JPY 134.95 136.01
NZD/USD 0.6132 0.6191
USD/CAD 1.3013 1.3078
USD/CNH 6.7033 6.719
AUD/JPY 91.5 92.51
AUD/NZD 1.1012 1.1039
DXY 106.358 107.264

 

Equity Index Daily % Change Closing Level
ASX -0.5% 6594
SHANGHAI COMP -1.4% 3355
NIKKEI -1.2% 26108
FTSE 1.2% 7108
DAX 1.6% 12595
CAC 2.0% 5912
DOW JONES 0.2% 31038
S&P 500 0.4% 3845
NASDAQ 0.3% 11362
VIX -2.9% 26.73
 
     
CRUDE OIL -1.1% 98.4
ICE NAT GAS -4.8% 276.4
GOLD -1.5% 1738.4
SILVER -0.1% 19.2
SGX IRON ORE -0.4% 110.7
CMX COPPER 0.7% 344.1
ICE SUGAR 1.1% 18.0
ICE COTTON -5.2% 276.4
CBT WHEAT 0.0% 806.8
BITCOIN -0.7% 20308.4
CRUDE OIL -1.1% 98.4
 
     
Rates Markets Yield Daily Change
US 2 YEAR 2.97% 15.2
US 10 YEAR 2.93% 12.0
AUST 2 YEAR 2.45% -4.0
AUST 10 YEAR 3.40% -14.4

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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