USD moved higher (USDIndex 103.10), Stocks TANKED into close (NASDAQ -2.75%, Dow -600 pts & S&P close to -100 pts) Futures steady. ECB cut growth and raised inflation forecasts, confirmed end of PEPP and 25bp rate hike in July (some wanted 50bp) & 25bp in Sept. (the caution weighed on EUR). Yields rallied (US 5yr & 10yr back over 3.00%, 2yr at 2.84%), Asian markets have mostly slipped, (Nikkei -1.49%). Yellen inflation a serious problem “what I am focused on”. Goldmans & Deutsche now expect 2 x 50bp hikes from ECB in Sept & Oct and RTS poll sees the same from FED (bring it to 4 x 50bp hikes). Oil slips but holds on to gains, Gold remains pressured by rising yields. NZD bid overnight.
- USDIndex rallied to 103.33 apost ECB and ahead of US CPI today.
- Equities – USA500 -98 (-2.38%) at 4017, US500FUTS at 4025 now. AMZN –4% BABA +-8.13%, NFLX -4.96%, APPL -3.60% GOOGL -2%, MRNA -9.76%
- Yields 10-year yield higher (3.064% at close), trades at 3.055% now.
- Oil & Gold had weaker sessions – USOil slipped but holds over $120.00 handle, Gold sank as Yields rallied from over $1855 to $1845 now.
- Bitcoin continues to pivot around $30K.
- FX markets – EURUSD down at 1.0630, from a spike to 1.0770, USDJPY tested 134.50 zone (24-yr high) and holds 134.00, Cable trades down at 1.2500, from 1.2550.
Overnight – PPI in Japan missed (9.1% vs 9.9%) but remains high, China CPI missed (2.1% vs 2.2%) & PPI in line 6.4% & down from 8% last month (Shanghai lockdowns)
Today – US CPI, Canadian Jobs Report, US University of Michigan (Prelim.) & Speech from ECB’s Lagarde.
Biggest FX Mover @ (06:30 GMT) NZDUSD (+0.54%). Moves higher from 0.6380 to 0.6420, as NZD gets a bid in the Asian session. Next key resistance 0.6450. MAs aligning higher, MACD histogram negative but turning higher, RSI 54 & rising, H1 ATR 0.0011, Daily ATR 0.0068.
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Stuart Cowell
Head Market Analyst
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