USD and even more so the Yen struggled as risk appetite returned and safe haven flows abated. RBA minutes point to further tightening ahead. The minutes to the last meeting revealed that policy makers discussed three possible options for the rate hike they delivered, and that while the majority opted for a 25 bp move, they not only considered a smaller 15 bp step, but also the possibility of a 40 bp boost to official rates.UK wage growth tops forecast as labour market tightens. Stock markets moved higher, amid hopes that China’s Covid lockdowns, which have hit demand and output, have peaked, which helped sentiment stabilise. Yields backed up 3.3 bp to 2.91%. Oil rebounded to $114.96 whilst Gold appreciated to $1830.
- USDIndex dipped at 103.94. – tempering a long rally as investors cash out.
- Equities – USA30 ultimately finished with a fractional 0.08% gain, while the USA100 slumped -1.2%, with the USA500 -0.39% in the red. Nikkei and ASX up 0.4% and 0.3% respectively at the close. Hang Seng and CSI 300 gained 2.6% and 1.1% respectively, with a rally in some tech stocks and easing virus jitters helping to underpin a solid rebound.
- Tiger Global Management, Winslow Capital Management, Scopus Asset Management and other hedge funds dumped the entirety of their Netflix shares. The streaming company’s stock price has fallen 69% for the year to date.
- Yields 10-year Treasury rose to 2.9203% compared with its US close of 2.879% on Monday.
- Oil settled at $114.96 a barrel, a 2.4% gain, as Shanghai achieved the long-awaited milestone of three straight days with no new COVID-19 cases outside quarantine zones, which could lead to the beginning of the lifting of restrictions.
- Gold up to $1830.
- FX markets – EURUSD up to 1.0463, USDJPY lifted to 129.23, Cable spiked to 1.2380. AUD was supported by the hawkish leaning RBA minutes and the rise in oil prices.
Today – The calendar includes prelim. EU GDP Q1, US Retail Sales, industrial production, business inventories. Fedspeak Tuesday from Chair Powell, Bullard, Harker, Kashkari, Mester, Evans.
Biggest FX Mover @ (06:30 GMT) GBPJPY (+0.91%) Rallied to 1.6057. MAs aligning higher, MACD signal line & histogram keep rising, RSI 74.64, H1 ATR 0.364, Daily ATR 2.063.
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Andria Pichidi
Market Analyst
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