USDIndex down to 106.52. US Stocks continued to rally overnight, after European and US markets posted broad gains yesterday (NASDAQ +3.11%) amid strong earnings and the expected resumption of Russian gas supply to Europe helping lift risk-on sentiment and ease fears of a recession. UK CPI inflation lifted to 9.4% y/y in June from 9.1% y/y in the previous month. Core inflation eased slightly, but at 5.8% y/y still remains far, far above target. German PPI inflation eased slightly.
Earnings: Netflix shares jumped after earnings beat; it lost fewer subscribers than expected and says cheaper ad tier is coming in early 2023. Boeing rose on deal to sell jets to 777 Partners, Johnson & Johnson and IBM fell on dollar impact warning, Halliburton, Hasbro & Truist rose after profit beat. Johnson & Johnson beat analysts’ estimates on strength in its pharmaceuticals unit, even as the company cut its full-year adjusted profit forecast due to a stronger Dollar. Twitter Inc. and Elon Musk will go to trial in October over whether the billionaire must complete his $44 billion acquisition of the social media company, a Delaware judge ruled on Tuesday. Amazon.com filed a lawsuit against the leaders of more than 10,000 Facebook groups it accused of publishing fake reviews on the e-commerce site, the company announced on Tuesday.
- USDIndex is mired at two-week lows to 106.52. It has fallen 2 handles in two days from a 20+ year high of 108.54 last Thursday.
- Equities – USA500 climbed 2.76%, USA100 surged 3.11% followed by a 2.43% jump in the USA30. JPN225 gained 2.7%, the ASX 1.7% and Hang Seng and CSI lifted 1.6% and 0.2% respectively.
- Yields 10-year Treasury yield is up 0.2 bp at 3.02%.
- Oil down to 98.70 & Gold steady at $1707.
- FX Markets – EURUSD has climbed to 1.0233 ahead of Thursday’s ECB meeting. USDJPY has corrected to 137.52. Cable at 1.2008.
Today: Canadian CPI. Earnings – Tesla, ASML Holding, Abbott Laboratories etc. For Europe the day of reckoning will come tomorrow when the ECB meeting coincides with the day the Nordstream 1 pipeline is supposed to re-open after scheduled maintenance work. If Russia doesn’t re-open and the ECB announcement disappoints Eurozone stocks and the EUR are likely to sell off in tandem with Eurozone peripherals.
Biggest FX Mover @ (06:30 GMT) US100 (+3.10%). Spiked to 12,356. Next resistance 12,600 & 12,945. MAs aligned, turning lower in 1-hour chart, MACD histogram & signal line hold higher, RSI 66 but falling.
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Andria Pichidi
Market Analyst
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