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Navigate Global Payments – Markets Today 3rd August 2022

 

MARKET WRAP – 3rd August 2022

 

  • Markets were choppy throughout the APAC, European and US sessions with the anticipated Pelosi trip to Taiwan initially hitting risk assets and supporting havens but her safe arrival saw a brief unwind of the selling pressures in equities to see stocks go positive in the afternoon.

 

  • The AUD/USD pair trades near a daily low of 0.6911, The Australian currency came under strong selling pressure following the Reserve Bank of Australia monetary policy decision. The central bank lifted the cash rate by 50 bps as expected, surprising investors with a more conservative statement. Policymakers agreed this was one more step towards normalization but removed the term “extraordinary” stimulus from its policy statement.

 

  • China started to react by implementing military drills around Taiwan while 21 PLA jets entered the southwest ADIZ. Stocks ultimately finished lower with the geopolitical tensions weighing as China starts to respond to the visit and is starting to have domestic impacts.

 

  • Chinese battery giant CATL is reportedly pausing its North American battery plant announcement due to the Taiwan trip. The factory was meant to supply auto giants Ford (F) and Tesla (TSLA).

 

  • Meanwhile, Fed speak has been hawkish where 2022 voter Mester stated she is seeing no signs of inflation easing and that it is not going to come down quickly while reiterating the Fed’s commitment to bringing inflation under control, something that Daly also said early in the morning while Evans believes 50bps is reasonable for September but said 75bps remains a Possibility.

 

  • FED: Daly (2024 voter) stated work on inflation is nowhere near almost done, and there is still a long way to go on that task.

 

  • Meanwhile, FED Daly added she is looking at incoming data to decide if we can downshift rate hikes or continue at the current pace. On rates, Daly’s modal outlook is we raise interest rates and hold them there for a while.

 

 

  • The Dollar was bid on its haven demand and the pronounced move higher in yields while a weaker Euro from the impact on the EZ economy on a potential fallout with China was also

 


TODAY’S KEY RISK EVENTS

• NZ – 2Q Unemployment Rate

• NZ – 2Q Pvt Wages Ex Overtime q/q and Jul ANZ Commodity Price m/m

• AU – 2Q Retail Sales Ex Inflation q/q

• CN – Jul PMI Services

• EU – Jun PPI y/y and Jun Retail Sales y/y

• US – Jun Factory Orders and Jul Services Index

 

CURRENCY/INDICIES RANGES

Currency Pair Low High
AUD/USD 0.69125 0.7032
EUR/USD 1.0165 1.0294
GBP/USD 1.2164 1.2279
USD/JPY 130.4 133.15
NZD/USD 0.62535 0.6339
USD/CAD 1.28345 1.28865
USD/CNH 6.7494 6.7945
AUD/JPY 90.49 92.59
AUD/NZD 1.1009 1.1099
DXY 105.049 106.312

 

Equity Index Daily % Change Closing Level
ASX 0.1% 6998
SHANGHAI COMP -2.3% 3186
NIKKEI -1.4% 27595
FTSE -0.1% 7409
DAX -0.2% 13449
CAC -0.4% 6410
DOW JONES -1.2% 32396
S&P 500 -0.7% 4091
NASDAQ -0.2% 12349
VIX 4.9% 23.97
Commodity Daily % Change Closing Level
CRUDE OIL 0.3% 94.2
ICE NAT GAS 3.5% 361.5
GOLD -0.8% 1762.6
SILVER -1.0% 20.0
SGX IRON ORE -0.9% 113.7
CMX COPPER -1.7% 348.1
ICE SUGAR 0.5% 17.7
ICE COTTON 0.8% 361.5
CBT WHEAT -3.3% 774.0
BITCOIN -1.5% 23040.8
Rates Markets Yield Daily Change
US 2 YEAR 3.06% 18.7
US 10 YEAR 2.75% 17.2
AUST 2 YEAR 2.47% 4.0
AUST 10 YEAR 2.98% -8.0

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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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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