Posted at 14 June 2022 / Categories Market Roundups
Market Roundup
•French 6-Month BTF Auction 0.531%, -0.295% previous
•French 3-Month BTF Auction-0.457%, -0.555% previous
•French 12-Month BTF Auction -0.178% ,0.239% previous
• UK NIESR GDP Estimate -0.1%,0.3% previous
• US 3-Month Bill Auction1.640%, 1.230% previous
• US 6-Month Bill Auction1.490%, 1.710% previous
Looking Ahead Economic Data(GMT)
•01:00 Australia House Price Index (QoQ) (Q1) 1.4% forecast, 4.7% previous
•01:00 Australia May NAB Business Confidence 10 previous
•01:00 Australia May NAB Business Confidence 10 previous
•04:30 Japan Apr Capacity Utilization (MoM) -1.6% previous
•04:30 Japan Apr Industrial Production (MoM) -1.3% previous
Looking Ahead - Events, Other Releases (GMT)
•No significant events
Currency Summaries
EUR/USD: The euro declined on Monday as dollar resumed its march as red-hot U.S. inflation fuelled worries about even more aggressive policy tightening in a big week for central banks. The inflation reading unnerved investors , as markets ratcheted up expectations on where U.S. interest rates would peak next year to around 4% from around 3% less than two weeks ago. Expectations of even more aggressive rate hikes from global central banks prompted investors to ramp up their bullish bets on dollar. This is a big week for central banks with the Fed, the Bank of England and Swiss National Bank holding policy meetings. Immediate resistance can be seen at 1.0499(38.2%fib),an upside break can trigger rise towards 1.0587(50%fib).On the downside, immediate support is seen at 1.0397(23.6%fib), a break below could take the pair towards 1.0361(Lower BB).
GBP/USD: Sterling declined against dollar on Monday after data showed Britain's economy unexpectedly shrank in April and from tensions with the European Union over post-Brexit trade with Northern Ireland. Gross domestic product contracted by 0.3% after falling by 0.1% in March, the first back-to-back declines since March and April 2020, at the start of the coronavirus pandemic. British economic growth is already expected to be among the weakest for rich countries in 2023, and there is uncertainty over how fast the Bank of England can raise interest rates to tame inflation without further hurting the economy. Immediate resistance can be seen at 1.2280(38.2%fib),an upside break can trigger rise towards 1.2316(5DMA).On the downside, immediate support is seen at 1.2093(23.6%fib), a break below could take the pair towards 1.2000 (Psychological level).
USD/CAD: The Canadian dollar fell to its lowest level in nearly three weeks against its broadly stronger U.S. counterpart on Monday as oil prices fell and investors weighed the prospect of aggressive interest rate hikes by global central banks to tackle inflation. Investors worry that aggressive monetary tightening by the Fed could tip the U.S. economy into recession. The price of oil, one of Canada's major exports, dropped as a flare-up in COVID-19 cases in Beijing dented hopes of a Chinese demand rebound.U.S. crude prices fell 1% to $119.42 a barrel, while the Canadian dollar was trading 0.6% lower at 1.2863 to the greenback , its fourth consecutive day of losses. Immediate resistance can be seen at 1.2901 (23.6%fib), an upside break can trigger rise towards 1.2950 (Higher BB).On the downside, immediate support is seen at 1.2803 (38.2%fib), a break below could take the pair towards 1.2705 (5 DMA).
USD/JPY: The dollar declined against dollar on Monday as yen strengthened on speculation Japanese authorities could intervene to support the currency. The Bank of Japan (BoJ) has so far resisted pressure to tighten policy, weakening the country's currency. The policy divergence has sent the yen down more than 15% against the dollar since early March.Japan's top government spokesperson said on Monday Tokyo stood ready to "respond appropriately" if needed. The yen fell as much as 0.6% on the day to 135.22 yen per dollar, its lowest since 1998. It was last trading at 134.00 yen per dollar. Strong resistance can be seen at 134.98 (23.6%fib), an upside break can trigger rise towards 135.31(Higher BB).On the downside, immediate support is seen at 133.12 (38.2%fib), a break below could take the pair towards 132.01(50%fib).
Equities Recap
European stocks tanked on Monday, extending losses from the previous session, as fears of a possible recession and news of a "ferocious" COVID-19 outbreak in Beijing's most populous district of Chaoyang sapped investors' appetite for riskier assets.
UK's benchmark FTSE 100 closed up by 1.09 percent, Germany's Dax ended down by 0.80 percent, France’s CAC finished the day down by 0.78percent.
The U.S. stock market's brutal year reached a grim milestone as the S&P 500's slide on Monday confirmed a bear market for the first time since March 2020, fueled by worries over sky-high inflation, a hawkish Federal Reserve and future economic growth.
Dow Jones closed down by 2.79% percent, S&P 500 closed by 3.88% percent, Nasdaq settled down by 4.68% percent.
Treasuries Recap
Benchmark 10-year Treasury yields hit their highest level since 2011 on Monday, and a key part of the yield curve inverted for the first time since April as investors braced for the prospect that the Federal Reserve’s attempts to stem soaring inflation will dent the economy.
Two-year yields reached 3.283%, the highest since December 2007. Five-year yields rose to 3.489%, the highest since July 2008, Benchmark 10-year yields hit 3.381%, the highest since April 2011.
The yield curve between two-year and 10-year notes inverted as far as 2 basis points, before rebounding to positive territory at 9 basis points.
Commodities Recap
Gold and palladium suffered sharp declines on Monday, as the dollar rallied on bets for steep interest rate hikes by the U.S. Federal Reserve, eroding appeal for bullion and other precious metals.
Spot gold fell 2.2% to $1,829.08 per ounce by 1:45 p.m. EDT (1745 GMT). Gold futures settled down 2.3% at $1,831.80.
Oil prices rose on Monday in a session of volatile trade as tight global supplies outweighed worries that demand would be pressured by a flare-up in COVID-19 cases in Beijing and more interest rate hikes.
Brent crude rose 26 cents to settle at $122.27 a barrel. U.S. West Texas Intermediate crude rose 26 cents to settle at $120.93 a barrel. Trade was volatile, with prices down about $3 a barrel earlier.