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Navigate Global Payments – Markets Today 8th June 2022

 

 

MARKET WRAP – 8th June 2022

  • The Reserve Bank of Australia (RBA) rose rates by 50 bps on Tuesday to 0.85%. Analysts at Wells Fargo expect the RBA to deliver another 50 bps rate hike in July to help tame inflation, before reverting to the more typical 25 bps increments in August, November, and December, which would bring the Cash Rate to 2.10% at the end of 2022. They expect the Australian dollar to soften against the US dollar over the medium-term as the RBA will still lag behind the Federal Reserve.
  • Attention heavily turns to the ECB rate decision on Thursday and US CPI on Friday, ahead of the Fed next Wednesday and SNB next Thursday.
  • Oil prices were choppy, in fitting with risk, but managed to settle firmer, wiping out the mid-afternoon slump while the latest STEO saw the EIA raise the 2022 & 2023 global production forecast, while raising 2022 global oil demand forecast but cutting the 2023 demand outlook slightly.
  • The Dollar index failed to rise above 103.00, trading between 102.25 and 102.84 with resistance eyed on the round level, as well as the May 23rd peak of 102.95 as attention remains on the aforementioned key risk events this week as the buck tracked risk sentiment and yields.
  • US data was light, although US International trade data saw the deficit narrow by more than expected in April, as did the deficit with China. Meanwhile, the April US Consumer Credit cooled, but less than expected.

FX

  • The Dollar was choppy on Tuesday and tracked risk sentiment. The Dollar started the day firmer but as equities started to rally and yields moved lower, the buck wiped out its initial gains and entered negative territory although with a choppy risk environment, the dollar followed suit.
  •  The Dollar index failed to rise above 103.00, trading between 102.25 and 102.84 with resistance eyed on the round level, as well as the May 23rd peak of 102.95. The attention this week is heavily on US CPI on Friday, as well as Thursdays ECB policy announcement, preview.
  • The Euro was only marginally firmer but EUR/USD managed to rise above 1.07 and hold the key level into the US equity close.
  • USD/JPY extended on 20yr highs with the cross testing 133.00 to the upside but failing to breach the psychological level. USD/JPY was off highs as US yields and the buck headed lower, which also benefited Gold.
  • Meanwhile, overnight the BoJ Governor Kuroda reiterated the BoJ will support the economy by maintaining powerful monetary easing while the Economy Minister Yamagiwa said they are closely watching any impact of FX movements on the economy but wanted to refrain from commenting on specific levels.


TODAY’S KEY RISK EVENTS

The ECBPresident Lagarde & Co. are expected to hold rates unchanged, though market players await forward guidance regarding the APP and signals that the bank would shift policy to normal.

CURRENCY/INDICIES RANGES

Currency Pair Low High
AUD/USD 0.71565 0.72485
EUR/USD 1.0653 1.0713
GBP/USD 1.2433 1.26
USD/JPY 131.86 133
NZD/USD 0.64235 0.64985
USD/CAD 1.2524 1.26175
USD/CNH 6.6575 6.689
AUD/JPY 94.78 96.11
AUD/NZD 1.1078 1.116
DXY 102.26 102.839

 

Equity Index Daily % Change Closing Level
ASX -1.5% 7096
SHANGHAI COMP 0.2% 3242
NIKKEI 0.1% 27944
FTSE -0.1% 7599
DAX -0.7% 14557
CAC -0.7% 6500
DOW JONES 0.8% 33180
S&P 500 1.0% 4161
NASDAQ 0.9% 12175
VIX -4.2% 24.02
Commodity Daily % Change Closing Level
CRUDE OIL 1.0% 119.7
ICE NAT GAS -9.5% 136.3
GOLD 0.1% 1852.8
SILVER 0.2% 22.2
SGX IRON ORE 0.2% 144.9
CMX COPPER 0.4% 445.3
ICE SUGAR -3.0% 19.0
ICE COTTON 0.1% 136.3
CBT WHEAT -1.6% 1075.0
BITCOIN 4.9% 31349.2
Rates Markets Yield Daily Change
US 2 YEAR 2.73% 0.6
US 10 YEAR 2.98% -6.5
AUST 2 YEAR 2.79% 17.5
AUST 10 YEAR 3.56% 7.4

 

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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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