USD steady at 108.50, Oil holds above 200 DMA, Stocks and bonds weaker on poor earnings news and bearish spillover from Europe on recession fears and political turmoil, and dove on the initial PPI print which kept the door open for a hefty 100 bp rate hike from the FOMC at the upcoming July 26-27 meeting. China bourses were under pressure after weaker than expected data that included a 0.4% y/y rise in GDP, which clearly missed expectations for a 1.0% y/y rise.
Equity Market: JPMorgan and Morgan Stanley missed earning forecasts. Net income at both lenders fell nearly 30% in the second quarter as work on IPOs and SPACs dried up. It was the first earnings miss from either JPMorgan — the largest US lender by assets and an industry bellwether — or Morgan Stanley since the start of 2020. Alibaba Group Holding Ltd. dragged Chinese tech shares lower as concerns about a crackdown on the sector resurfaced after company executives were reported to be facing an inquiry linked to the theft of a vast police database.
- USDIndex garnered strong early support and rose to 29on diverging central bank stances and political uncertainties before drifting to 108.55.
- Yields: the 10-year was 2.8 bps higher at 2.961%, versus a 3.02% intraday peak.
- Stocks: In China, fresh worries of regulatory pressure are adding to a decline in tech stocks. The ASX also struggled and corrected -0.7%, but the Nikkei found a footing and lifted 0.5%, with the GER40 gaining nearly 1%, the UK1004%, and a 0.2% rise in the USA100.
- USOIL traded at $95.50 holding above 200-day SMA.
- Gold near 5th consecutive weekly loss. Currently down to $1,704.73.
- FX Markets: EURUSD slumped below parity to 9952before it bounced to 1.0023, USDJPY is still at a very high level at 138.70, Cable at 1.1820.
- Today –US Retail Sales. Earnings: UnitedHealth Group, Wells Fargo, BlackRock, Citigroup etc.
Biggest FX Mover @ (06:30 GMT) CHFJPY (+0.56%) breached 141.66. MAs aligned higher, MACD histogram & signal line extend further northwards, RSI above 70 but falling. H1 ATR 0.212, Daily ATR 1.404.
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Andria Pichidi
Market Analyst
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