Posted at 13 July 2022 / Categories Market Roundups
Market Roundup
•US Jun CPI (MoM) 1.3%,1.1%forecast, 1.0% previous
•US Jun Core CPI (YoY) 5.9%,5.7% forecast, 6.0% previous
•US Jun Core CPI (MoM) 0.7%,0.6% forecast, 0.6% previous
•US Jun CPI (YoY) 9.1%,8.8% forecast, 8.6% previous
• Canada BoC Interest Rate Decision 2.50%,2.25% forecast, 1.50% previous
•US Crude Oil Inventories 3.254M ,-0.154M forecast, 8.235M previous
•US Gasoline Inventories 5.825M,-0.357M forecast, -2.497M previous
•US Cushing Crude Oil Inventories 0.316M,0.069M previous
•US Jun Federal Budget -89.0B,-76.5B forecast, -66.0B previous
Looking Ahead - Economic Data (GMT)
• 01:00 Australia MI Inflation Expectations 6.7% previous
• 01:30 Australia Jun Unemployment Rate 3.8%forecast, 3.9% previous
• 01:30 Australia Jun Full Employment Change 69.4K previous
• 04:30 Japan May Industrial Production (MoM) -7.2% previous
Looking Ahead - Economic events and other releases (GMT)
•No significant events
Currency Summaries
EUR/USD: The euro edged higher against U.S. dollar on Wednesday after data on Wednesday showed U.S. consumer price inflation surged to a more than 40-year high in June.U.S. annual consumer prices jumped 9.1% in June, the largest increase in more than four decades, leaving Americans to dig deeper to pay for gasoline, food, healthcare and rent. The euro plunged to $0.9998 against the greenback after the data, breaking below the $1 level for the first time since December 2002, before bouncing back to last trade at $1.0061. The dollar index reached 108.59, the highest since October 2002, before falling back to 107.95. Immediate resistance can be seen at 1.0101 (5DMA), an upside break can trigger rise towards 1.0223(38.2% fib).On the downside, immediate support is seen at 1.0000 (Psychological level), a break below could take the pair towards 0.9949 (Lower BB).
GBP/USD: The British pound rose on Wednesdays as pound was supported after data showed the UK economy grew unexpectedly in May.Economic output expanded by 0.5% in May, although consumer services fell as the surge in inflation hit shoppers. A poll of economists had pointed to zero growth in May from April. The pound's fortunes on Wednesday were largely tied to moves in the dollar, however, with sterling weakening to as low as $1.1828 - near a two-year low - shortly after forecast-beating U.S. inflation data was released. Immediate resistance can be seen at 1.1949(5DMA), an upside break can trigger rise towards 1.2000 (38.2%fib).On the downside, immediate support is seen at 1.1821 (23.6% fib), a break below could take the pair towards 1.1727 (Lower BB).
USD/CAD: The Canadian dollar strengthened against its U.S. counterpart on Wednesday as the Bank of Canada hiked interest rates by a full percentage point, but the rally was limited as investors reasoned the Federal Reserve could also hike by that magnitude. The Bank of Canada's rate hike was the biggest in 24 years and surprised markets, which had been expecting the central bank to match the Federal Reserve's latest move of three-quarters of a percentage point. The loonie was trading 0.4% higher at 1.2975 to the greenback, after trading in a range of 1.2937 to 1.3060. The price of oil, one of Canada's major exports, clawed back a small part of its recent declines. Immediate resistance can be seen at 1.3066(23.6%fib), an upside break can trigger rise towards 1.3098 (Higher BB).On the downside, immediate support is seen at 1.2940 (38.2%fib), a break below could take the pair towards 1.2844 (30 DMA).
USD/JPY: The dollar dipped against the Japanese yen on Wednesday as investors digested a report showing U.S. annual consumer prices jumped 9.1% in June -the largest increase in more than four decades. The U.S. Federal Reserve is expected to deliver a rate hike of possibly up to 100 basis points this month after a mostly grim inflation report showed price pressures, already running at a 40-year high, accelerating further. Central bankers over the past couple of weeks hadsignaled they would support what would be a second straight 75basis-point rate increase at their upcoming policy meeting onJuly 26-27.But after Wednesday’s data from the Labor Department showed rising costs of gas, food and rent drove the consumer price index (CPI) up 9.1% last month from a year earlier, the view may have changed.Strong resistance can be seen at 137.45 (23.6% fib), an upside break can trigger rise towards 138.08(Higher BB).On the downside, immediate support is seen at 137.06 (5 DMA), a break below could take the pair towards 134.444 (38.2% fib).
Equities Recap
European stocks closed lower on Wednesday, weighed down by concerns about more policy tightening by the Federal Reserve after data showed a faster than expected acceleration in U.S. inflation in the month of June.
UK's benchmark FTSE 100 closed up by 0.93 percent, Germany's Dax ended down by 0.05 percent, France’s CAC finished the day down by 0.40 percent.
U.S. stocks closed modestly lower on Wednesday after investors digested hotter-than-expected U.S. inflation data, which fueled fears that the Federal Reserve could raise key interest rates by as much as 100 basis points later this month.
Dow Jones closed down by 0.67% percent, S&P 500 closed down by 0.45% percent, Nasdaq settled down by 0.15% percent.
Treasuries Recap
The benchmark U.S. Treasury yield curve on Wednesday posted its largest inversion since November 2000, as investors priced in a full percentage point of Federal Reserve tightening this month that could push the world's largest economy into recession.
U.S. two-year yields, which reflect interest rate expectations, surged to a four-week high of 3.215% and was last up nearly 9 bps at 3.129% .
Commodities Recap
Gold rebounded from a near one-year low on Wednesday as the dollar retreated following an initial rally, helping bullion stave off pressure from prospects of steep rate hikes after U.S. consumer prices surged.
Spot gold rose 0.8% to $1,739.49 per ounce by 1:59 p.m. ET (1759 GMT), clambering from its lowest since August 2021 at $1,707.09 after the U.S. data powered the dollar to a fresh multi-decade peak.
Oil prices rose modestly on Wednesday even after U.S. oil inventories rose and after U.S. inflation figures bolstered the case for another big Federal Reserve interest rate increase.
Brent crude settled up 8 cents at $99.57 a barrel, while U.S. West Texas Intermediate crude gained 46 cents to $96.30 a barrel.