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Navigate Global Payments – Markets Today 5th August 2022

 

MARKET WRAP – 5th August 2022

US stock indices were little changed on Thursday with external growth concerns brewing after the BOE’s sustained recession forecast.

 

The Dollar sold off quite heavily Thursday to see the index lose hold of the 106.00 handle amid a move lower in US yields while the risk tone was relatively mixed across asset classes with stocks mixed, oil tumbling and precious metals firmer.

 

The 50bps hike from the BOE was an afterthought for bond traders against its five-quarter

recession call, lifting global government bonds in reaction. The Pound managed to claw back its losses as Dollar selling extended through the US session, with another rise in initial claims data sustaining concerns over the outlook for the labour market – ongoing PLA drills around Taiwan don’t help the Dollar either.

 

US Fed speak saw Mester express her hawkish roots noting rates should go a bit above 4% next year before holding them there for a while until inflation returns closer to its target while she also called for a discussion on MBS sales.

 


TODAY’S KEY RISK EVENTS

RBA Quarterly Statement preview

 

The RBA’s quarterly statement on Monetary Policy is due today and will contain upgraded inflation forecasts. The Bank is likely to assume a higher cash rate profile than in May, which, alongside a weaker global growth outlook, should help to lower the growth outlook. It will be difficult for the staff to not forecast a rising unemployment rate at some stage with that backdrop.

 

 

US NFP Preview

 

The US economy is expected to add 250k nonfarm payrolls in July, with the pace of payroll additions cooling again amid tight labour market conditions.

 

The unemployment rate is expected to be unchanged at 3.6%. Traders will use the data to shape expectations of how the Fed will set policy at its September meeting.

 

The central bank is in a data-dependent, meeting-by-meeting mode, as it focuses on bringing inflation back to target. Accordingly, any upside surprise for the headline and wages will give the central bank scope to move rates higher by a larger increment in September, whereas any downside surprise to the headline may indicate that the slowing growth momentum has crept into Q3, and any downside surprise in the wages component may allow the central bank to revert to a smaller increment of rate hikes.

 

CURRENCY/INDICIES RANGES

Currency Pair Low High
AUD/USD 0.69355 0.69885
EUR/USD 1.0154 1.0254
GBP/USD 1.2065 1.222
USD/JPY 132.77 134.42
NZD/USD 0.6267 0.6315
USD/CAD 1.28185 1.2876
USD/CNH 6.7498 6.7678
AUD/JPY 92.5 93.8
AUD/NZD 1.1053 1.1079
DXY 105.668 106.511

 

Equity Index Daily % Change Closing Level
ASX 0.0% 6975
SHANGHAI COMP 0.8% 3189
NIKKEI 0.7% 27932
FTSE 0.0% 7448
DAX 0.6% 13663
CAC 0.6% 6513
DOW JONES -0.3% 32727
S&P 500 -0.1% 4152
NASDAQ 0.4% 12721
VIX -2.0% 21.50
Commodity Daily % Change Closing Level
CRUDE OIL -2.7% 88.2
ICE NAT GAS 2.4% 379.2
GOLD 0.1% 1791.5
SILVER 0.1% 20.2
SGX IRON ORE 1.2% 107.0
CMX COPPER 0.4% 348.0
ICE SUGAR -1.2% 17.6
ICE COTTON 0.2% 379.2
CBT WHEAT 2.4% 781.8
BITCOIN -0.3% 22516.8
Rates Markets Yield Daily Change
US 2 YEAR 3.04% -3.2
US 10 YEAR 2.69% -1.6
AUST 2 YEAR 2.66% 6.7
AUST 10 YEAR 3.14% 7.0

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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