Posted at 06 July 2022 / Categories Market Roundups
Market Roundup
•Canada May Building Permits (MoM) 2.3%, 0.7% forecast, -0.6% previous
•US Factory May orders ex transportation (MoM) 1.7%,0.3% previous
•US May Durables Excluding Defense (MoM) 0.7%, 0.6% previous
•US May Factory Orders (MoM) 1.6%, 0.5% forecast,0.3% previous
•New Zealand GlobalDairyTrade Price Index -4.1%, -1.3% previous
•US 3-Month Bill Auction 1.850%, 1.750% previous
•US 6-Month Bill Auction 2.500%, 2.500% previous
Looking Ahead Economic Data(GMT)
•01:30 Australia RBA Chart Pack Release
Looking Ahead - Events, Other Releases (GMT)
• No significant events
Currency summaries
EUR/USD: The euro sank to a two-decade low versus the dollar on Tuesday as a jump in natural gas prices reignited worries about the euro zone economy and data showed business growth in the region slowed sharply in June. Recession fears in the euro zone were exacerbated by worries over an energy crisis in Europe and Tuesday's data showed a sharp slowdown in business growth in June, after Monday news of an seasonally adjusted trade deficit in Germany versus expectations for a surplus. The euro dropped by almost 1.8% against the dollar to $1.0236 , its weakest level since December 2002.Immediate resistance can be seen at 1.0357 (50%fib),an upside break can trigger rise towards 1.0438 (61.8%fib).On the downside, immediate support is seen at 1.0228 (38.2%fib), a break below could take the pair towards 1.0162 (23.6%fib).
GBP/USD: Sterling fell to a two-year low against the dollar on Tuesday as the crisis in British Prime Minister Boris Johnson's government put pressure on a currency already battered by recession fears. Finance Minister Rishi Sunak resigned minutes after the health minister resigned, saying he had lost confidence in Johnson's ability to govern in the national interest. The resignations could be the final blow to Johnson's premiership after he tried to apologize for the latest scandal to mark his nearly three-year tenure. Immediate resistance can be seen at 1.2070(5DMA),an upside break can trigger rise towards 1.2156 (38.2%fib).On the downside, immediate support is seen at 1.1934(23.6%fib), a break below could take the pair towards 1.8857(Lower BB).
USD/CAD: The Canadian dollar posted its biggest decline against its much stronger US counterpart since August of last year on Tuesday, as investors dumped currencies and other assets sensitive to the global economic outlook. Equity markets globally fell, the safe-haven U.S. dollar jumped against a basket of major currencies and the price of oil, one of Canada's major exports tumbled. The loonie was trading 1.3% lower at 1.3030 to the greenback, or 76.75 U.S. cents, after touching its weakest since November 2020 at 1.3083 .Immediate resistance can be seen at 1.3075 (23.6% fib), an upside break can trigger rise towards 1.311 (Higher BB).On the downside, immediate support is seen at 1.2942 (38.2% retracement level), a break below could take the pair towards 1.2928 (11 DMA).
USD/JPY: The dollar rose against Japanese yen on Tuesday as the dollar stood tall as investors awaited non-farm payroll data later in the week. The payrolls report on Friday is forecast to show jobs growth slowing to 270,000 in June, with average earnings slowing a touch to 5.0%. Tuesday offers little in the way of economic data, but later this week the U.S. Federal Reserve and European Central Bank release their minutes from recent policy meetings and on Friday widely watched U.S. payrolls data will be published. Strong resistance can be seen at 136.49 (23.6%fib), an upside break can trigger rise towards 137.75 (Higher BB).On the downside, immediate support is seen at 135.04 (21DMA), a break below could take the pair towards 133.60(38.2%fib).
Equities Recap
European stocks slid 2.1% on Tuesday as soaring energy prices stoked inflation worries, sending the euro sinking on recession concerns, while German utility Uniper extended its tumble amid worries about its bailout.
UK's benchmark FTSE 100 closed up by 2.86 percent, Germany's Dax ended down by 2.91 percent, France’s CAC finished the day up by 2.86 percent.
The S&P 500 ended slightly higher on Tuesday as investors kept their focus on the growth trajectory of the U.S. economy, and the tech-heavy Nasdaq closed higher while the Dow slipped.
Dow Jones closed down by 0.42% percent, S&P 500 closed up by 0.16% percent, Nasdaq settled up by 1.75% percent.
Treasuries Recap
A key part of the U.S. Treasury yield curve briefly inverted for the first time since mid-June on Tuesday, reflecting investor concern that hefty interest-rate hikes could tip the U.S. economy into a recession.
Ten-year U.S. Treasury yields rose to as high as 2.978%, versus Friday's close of 2.90%, playing catch up with a broader rise in European government debt yields after cash trading resumed after Monday's July 4 holiday.
Commodities Recap
Gold lost more than 2% on Tuesday to sink further below the $1,800 support level as a sharp rally in the dollar and rising interest rates sapped appetite for the non-yielding asset.
Spot gold was trading at $1,765.22 per ounce by 1:45 p.m. ET (1745 GMT), having earlier declined as much as 2.6%. U.S. gold futures settled down 2.1% at $1,763.9 per ounce.
Oil plummeted about 9% on Tuesday in the biggest daily drop since March on growing fears of a global recession and lockdowns in China that could slash demand.
Global benchmark Brent crude settled at $102.77 a barrel, losing $10.73, or 9.5%. U.S. West Texas Intermediate (WTI) crude ended8.2%, or $8.93, lower at $99.50 a barrel. There was no WTI settlement on Monday because of a U.S. holiday.