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Markets Today – 8th July 2022

 

 

MARKET WRAP – 8th July 2022

  • The AUD/USD pair benefited from the positive tone of global equities, recovering up to 0.6847 on Thursday. Concerns about economic growth and overheated inflation have been temporarily put aside, as the focus shifts to US employment data.

 

  • The Dow Jones Industrial Average advanced 1.1% to 31,384.55, the S&P 500 was up 1.5% to 3,902.62 and the Nasdaq Composite was 2.3% higher at 11,621.35.

 

  • In the UK, Boris Johnson announced he will resign once a new party leader is chosen, after his own party sought his resignation amid a series of scandals. The pound rose as much as 0.6% on the news.

 

  • The US 10-year yield jumped 8.9 basis points to 3%.

 

  • 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.

 

  • The seasonally adjusted number of initial unemployment claims advanced by 4,000 to 235,000, the highest level since Jan. 15, during the week ended July 2, the Department of Labor said Thursday. The consensus on Econoday was for 230,000. The previous week’s level was unrevised at 231,000.

 

  • Asian equities were higher across the board on the close, despite Shanghai reporting the highest number of Covid cases since May. The ASX finished Thursday’s session up 0.8%, buoyed by miners, stabilising oil and iron prices.

 

  • The BOE said that UK firms expect wages to rise 5.1% in the next year, while they expect they will increase prices by 6.3%. In a BOE poll, 1-year CPI inflation expectations are at 7.4%, and 3-year 4.0%. UK’s Obr said UK public debt is on an unsustainable path long term, adding that tax raises or spending cuts are needed by Treasury.

 

  • China is mulling a $220bn stimulus package with unprecedented bond sales. LME copper rallied as much as 3.6% on the release.

 

FX

  • DXY came under selling pressure following four consecutive daily advances and revisits the sub-107.00 area on Thursday.

 

  • EUR/USD trades near a fresh multi-year low of 1.0143, as ECB Meeting Accounts showed policymakers’ determination to move forward with their cautious stance on monetary policy.

 

  • GBP/USD has regathered bullish momentum and climbed above 1.2000 during the American session. BOE policymaker Catherine Mann said on Thursday that the uncertainty about the inflation process strengthens the case for front-loading interest rate rises.

 

  • USD/JPY edged lower on Thursday amid a modest USD pullback from a two-decade high. A positive risk tone undermined the safe-haven JPY and acted as a tailwind for the pair. The divergent Fed-BoJ policy stance supports prospects for the emergence of dip-buying.

 


                                                    TODAY’S KEY RISK EVENTS

  • US Non-Farm Payrolls will be the key risk event that FX traders will be focused on an hour before US market open tonight.  Chinese consumer prices will also have an impact on AUD but price action will have to wait till Monday morning to show the impact of the event.

                                                                                                          

CURRENCY/INDICIES RANGES

Currency Pair Low High
AUD/USD 0.6765 0.6848
EUR/USD 1.0145 1.0221
GBP/USD 1.1912 1.2030
USD/JPY 135.55 136.22
NZD/USD 0.6144 0.6194
USD/CAD 1.2963 1.3052
USD/CNH 6.6919 6.7200
AUD/JPY 91.86 93.16
AUD/NZD 1.1027 1.1080
DXY 106.714 107.235

 

Equity Index Daily % Change Closing Level
ASX 0.8% 6648
SHANGHAI COMP 0.3% 3364
NIKKEI 1.5% 26491
FTSE 1.1% 7189
DAX 2.0% 12843
CAC 1.6% 6007
DOW JONES 1.1% 31385
S&P 500 1.5% 3903
NASDAQ 2.3% 11621
VIX -2.4% 26.08
 
     
Commodity Daily % Change Closing Level
CRUDE OIL 3.8% 102.2
ICE NAT GAS 7.9% 298.3
GOLD 0.1% 1740.4
SILVER 0.1% 19.2
SGX IRON ORE 0.1% 113.7
CMX COPPER 4.0% 354.5
ICE SUGAR 2.9% 18.5
ICE COTTON 3.7% 298.3
CBT WHEAT 4.1% 837.8
BITCOIN 0.05% 21,600
 
     
Rates Markets Yield Daily Change
US 2 YEAR 3.02% 0.18%
US 10 YEAR 3.00% 0.67%
AUST 2 YEAR 2.51% 0.68%
AUST 10 YEAR 3.47% 0.65%

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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