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Navigate Global Payments – Markets Today 9th June 2022

 

 

MARKET WRAP – 9th June 2022

  • Trading was choppy across the FX board, with most major pairs holding on to familiar levels, except for the USD/JPY pair, which surged to a fresh 20-year high of 134.47. The imbalance between the US Federal Reserve and the Bank of Japan boosted the pair as the BOJ reaffirmed its decision to maintain the ultra-loose monetary policy.

 

  • The AUD/USD pair lost the 0.7200 threshold, dragged by the poor performance of US indexes. White House spokeswoman Karine Jean-Pierre said they expect the inflation numbers to be released at end of the week to be elevated, spurring risk aversion.

 

  • Stocks were lower Wednesday (SPX -1.1%, NDX -0.8%, RUT -1.5%) as tentative gains entering the session faded through NY cash Trade.

 

  • The Dollar saw marginal gains on Wednesday amid downside in US equities and upside in yields ahead of key risk events (ECB Thursday, US CPI Friday) while the continued weakness for Yen provided a tailwind for the DXY, although that was offset by marginal gains for the Euro ahead of the ECB on Thursday

 

  • Catalysts were light for macro sentiment, with US participants instead awaiting Fridays CPI although lows in stocks were seen in wake of the new SEC rules on markets as it takes a tighter grip on regulation.

 

  • Meanwhile, US natural gas futures tumbled after an explosion was reported at the Freeport LNG export terminal in Texas, with more supply trapped in the US, at the expense of importers.

 

FX

  • The Aussie gave back some of its gains post RBA but it still outperformed its Antipodean counterpart with AUD/NZD rising above 1.1150.

 

  • CAD was the relative cyclical outperformer, aided by oil’s strength, although still weaker on broader risk aversion. The Looney still remains at elevated levels and USD/CAD remains around monthly lows.

 

  • Yen weakness accelerated on Wednesday to see USD/JPY hit a high of 134.47 after commentary from Japanese officials and a move higher in US yields. EUR/JPY has also become a popular trader vehicle for hitting the Yen as the cross hit highs of 144.25 today.

 

  • Although BoJ Kuroda sounded a little more concerned about the rapid pace of moves seen recently, he added various macroeconomic models show a weak Yen is positive and the BoJ must continue with monetary easing.


TODAY’S KEY RISK EVENTS

  • European Monetary Policy Statement. Analysts at ING highlight that any message from the ECB that does not signal an openness to a 50bp hike in July would likely fall short of the market’s hawkish expectations and push EUR/USD closer to 1.0500
  • Chinese Trade Balance Data – Chinese Trade data will be the focus in the Asian session.  Macquarie Strategy expect a small rebound in exports and imports growth, with COVID-related supply disruptions easing in May. The contraction in the national freight index narrowed in May, and the manufacturing PMI rebounded from the low in April.
  • US Jobless Claims

Source FX Street

CURRENCY/INDICIES RANGES

Currency Pair Low High
AUD/USD 0.7176 0.7234
EUR/USD 1.0672 1.0748
GBP/USD 1.25145 1.2597
USD/JPY 132.61 134.48
NZD/USD 0.6437 0.6487
USD/CAD 1.2518 1.2565
USD/CNH 6.6675 6.7018
AUD/JPY 95.7 96.87
AUD/NZD 1.114 1.1162
DXY 102.269 102.776

 

Equity Index Daily % Change Closing Level
ASX 0.4% 7121
SHANGHAI COMP 0.7% 3264
NIKKEI 1.0% 28234
FTSE -0.1% 7593
DAX -0.8% 14446
CAC -0.8% 6449
DOW JONES -0.8% 32911
S&P 500 -1.1% 4116
NASDAQ -0.7% 12086
VIX -0.2% 23.96
Commodity Daily % Change Closing Level
CRUDE OIL 2.6% 122.5
ICE NAT GAS -4.7% 129.9
GOLD -0.2% 1851.8
SILVER -0.4% 22.0
SGX IRON ORE 0.5% 145.5
CMX COPPER 0.1% 444.2
ICE SUGAR 0.1% 19.2
ICE COTTON 2.2% 129.9
CBT WHEAT 0.3% 1075.0
BITCOIN -0.4% 30177.4
Rates Markets Yield Daily Change
US 2 YEAR 2.78% 4.6
US 10 YEAR 3.03% 4.9
AUST 2 YEAR 2.74% -5.7
AUST 10 YEAR 3.55% -1.1

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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