• US indices finished yesterday’s session significantly lower. S&P 500 dropped 2.11%, Dow Jones moved 1.54% lower and Nasdaq slumped 2.84%. Russell 2000 finished 2.35% lower
  • Interestingly, declines came in spite of a weakening of the US dollar yesterday. US 10-year yields hold below 3.8%
  • Indices from Asia-Pacific traded lower as well. Nikkei dropped 2.1%, S&P/ASX 200 moved 1.1% lower and Kospi traded 0.3% down. Indices from China traded 0.1-0.7% lower
  • DAX futures point to a flat opening of the European cash session
  • GBPUSD continued recovery and jumped above 1.11 handle, erasing most of declines made since ‘mini-budget’ announcement last Friday
  • Local governments allowed for relaxation of mortgage rate limits in almost two dozen Chinese cities, in an attempt to support property market
  • Fed Daly said that US interest rates got to neutral levels. She also said that a deep recession is neither warranted, nor necessary
  • Chinese Caixin/Markit manufacturing PMI jumped from 49.4 to 50.1 in September (exp. 49.5) while services gauge dropped from 52.6 to 50.6 (exp. 52.4)
  • Japanese industrial production increased 2.7% MoM in August (exp. 0.2% MoM). Retail sales increased 1.4% MoM (exp. 0.2% MoM)
  • Japanese unemployment rate dropped from 2.6 to 2.5% in August (ex. 2.5%)
  • Australian private sector credit increased 0.8% MoM in August (exp. 0.6% MoM)
  • Cryptocurrencies are trading mostly higher today but the scale of moves is small. Bitcoin and Ethereum gain 0.2% each while Ripple lags and drops 1.5%
  • Energy commodities are trading slightly lower with Brent dropping 0.3% and WTI moved 0.5% lower
  • Precious metals trade higher – gold gains 0.4% while silver jumps 0.7%
  • GBP and EUR are the best performing major currencies while NZD and CAD lag the most

Nasdaq-100 (US100) slumped yesterday but bulls managed to prevent a drop below the 11,200 pts support zone. However, price action recently has been ugly and another attempt at breaking below cannot be ruled out.

  • US indices recovered from early-session losses yesterday and finished trading with significant gains. S&P 500 jumped 1.97%, Dow Jones moved 1.88% higher and Nasdaq added 2.05%. Russell 2000 jumped 3.17%
  • Recovery in risk moods was accompanied with a drop in US yields and weakening of the US dollar. 10-year US yields pulled back from around 4% to below 3.8%
  • Moods were additionally supported by Fed’s Bostic comments. While he said that he will support another 75 bp rate hike at the next FOMC meeting, he also said that first signs of easing price pressures are emerging
  • Indices from Asia-Pacific followed the US lead and also traded higher. Nikkei gained 0.8%, S&P/ASX 200 moved 1.8% higher and Kospi jumped 0.9%. Indices from China traded 0.2-0.5% higher
  • DAX futures point to a higher opening of the European cash session
  • Fed’s Evans said that policy rates at 4.50-4.75% at the end of 2022 or end of Q1 2023 would be a good place to get
  • UK Chief Secretary to the Treasury Philp said that course on tax cut plan will not be changed
  • RBC sees a chance of 500-1000k bpd output cut at next OPEC+ meeting (October 5, 2022)
  • BlackRock said it is avoiding most stocks as markets haven’t yet fully priced-in an upcoming recession
  • Australian CPI inflation decelerated from 7.0% to 6.8% YoY in August
  • Major cryptocurrencies are trading slightly lower today. Bitcoin drops 0.7% while Ethereum trades 0.8% lower
  • Oil and precious metals are trading lower today as USD managed to regain some ground overnight. Brent and WTI drop around 0.4% while gold trades 1% down
  • USD and JPY are the best performing major currencies while GBP and NZD are top laggards

Russell 2000 (US2000) bounced off the 1,650 pts support zone and launched a strong upward move. Index jumped over 3% yesterday amid broad improvement in risk moods.

  • US indices finished yesterday’s trading mixed after a volatile session. S&P 500 dropped 0.21%, Dow Jones moved 0.43% lower while Nasdaq gained 0.25% and Russell 2000 moved 0.40% higher
  • US 10-year yields briefly breached 4% yesterday but have pulled back to 3.97% since
  • US dollar gained after White House official Brian Deese said he does not expect major economies to agree on an accord aimed at weakening USD as it was the case in 1985
  • Indices from Asia-Pacific slumped during the session today. Nikkei dropped 2%, S&P/ASX 200 moved 0.7% lower while Kospi traded 2.7% down. Indices from China traded 0.2-2.5% lower
  • DAX futures point to a lower opening of the European cash session today
  • US Treasury Secretary Yellen said that financial markets are operating normally and that she does not see any liquidity issues in the markets
  • Moody’s said that new UK fiscal measures are credit negative as tax cuts are massive but lack funding
  • According to BoJ minutes, BoJ members see fears of global slowdown intensifying and price increases in Japan broadening. Members see need to carefully watch impact on rapid FX moves on inflation
  • Goldman Sachs expects Brent price to average $100 in Q4 2022, down from previous forecast of $125. Bank also expects average Brent price in 2023 at $108, also down from $125 previously expected
  • Australian retail sales increased 0.6% MoM in August (exp. 0.5% MoM)
  • API report pointed to a 4.15 million barrel build in US oil inventories (exp. +0.3 mb)
  • Cryptocurrencies are pulling back. Bitcoin trades 1.1% lower, Ethereum drops 2.8% while Ripple trades 4% lower
  • Commodities trade lower amid USD strengthening. Brent and WTI trade around 0.7% lower. Gold drops 0.3% while silver trades 1.2% down
  • USD and JPY are the best performing major currencies while NZD and AUD lag the most

EURUSD painted a fresh 20-year low near 0.9550 as the USD rally resumed

  • US indices finished yesterday’s session lower. S&P 500 dropped 1.13%, Dow Jones moved 1.01% lower while Nasdaq fell 0.95%. Russell 2000 plunged 1.36%
  • Indices from Asia-Pacific also traded lower today. Nikkei fell 1.25%, S&P/ASX 200 lost 1.6% while Kospi dropped 0.90%. Indices from China traded lower.
  • DAX futures point to a slightly higher opening of the European cash session
  • JP Morgan expects tat FED will raise interest rates by 75bp today, target rate of 4.25% by Feb23
  • Asian Development Bank lowered China growth outlook for 2022 to 3.5% from 5.0% estimate in April
  • Chinese authorities implement a lockdown in Tangshan city, which is a major steel producer.
  • RBA Deputy Governor Michelle Bullock said central will report a substantial loss in its 2021/22 annual account and be in negative equity for the period due to its massive bond-buying program. She also mentioned that policy rate level is not yet restrictive
  • Reuters’ latest poll shows that economists do not think that Japan will intervene to stem the decline in the yen
  • API survey showed 1,035 million barrels build, below market expectations of a 2.321-million-barrel increase
  • Putin further delays his speech to the nation, while German Chancellor Olaf Scholz said Putin needs to recognize that he can’t win the war, according to a report from Reuters.
  • Cryptocurrencies are trading higher today. Bitcoin rose 1.4% and Ethereum jumped 2.6%
  • Oil prices rose 0.30%. WTI trades near $84.20 per barrel while Brent is testing $90.90 mark
  • Slightly upbeat moods prevail on the precious metals market. Gold trades 0.10% higher and silver gains 0.60%
  • USD and CAD are the best performing major currencies while AUD and JPY lag the most

US2000 once again managed to defend a major support zone around 1790 pts.

  • US indices finished yesterday’s trading higher. S&P 500 gained 0.69%, Dow Jones moved 0.64% higher and Nasdaq added 0.76%. Russell 2000 jumped 0.81%
  • Indices from Asia-Pacific followed into footsteps of US peers and traded higher today. Nikkei gained 0.5%, S&P/ASX 200 moved 1.2% and Kospi jumped 0.6%. Indices from China traded 0.1-1.2% higher
  • DAX futures point to a higher opening of the European cash session
  • White House extended timeline for SPR releases and sale of the final 10 million barrels was pushed back from October to November
  • David Malpass, President of World Bank, warned that global economic slowdown may last into 2023
  • RBA minutes did not include any major surprises and were mostly in-line with recent speech from Governor Lowe, who suggested that pace of rate hikes may slow soon
  • People’s Bank of China left 1- and 5-year Loan Prime Rates unchanged at 3.65% and 4.30%, respectively. Decision was in-line with expectations
  • Japanese CPI inflation accelerated from 2.6 to 3.0% YoY in August. Core measure jumped from 2.4 to 2.8% YoY (exp. 2.7% YoY)
  • Cryptocurrencies are pulling back but the scale of declines is nowhere near as big as the one from the weekend or yesterday’s morning. Bitcoin drops 0.6% while Ethereum trades 1.2% lower
  • Oil trades a touch higher this morning. Precious metals trade mixed – silver (-0.5%) and gold (-0.2%) drop while platinum gains (+0.6%)
  • EUR, GBP and CAD are the best performing major currencies while NZD and CHF lag the most. Overall, trading ranges on G10 pairs are narrow

Rally on USDJPY eased somewhat as of late and the pair started to trade sideways in the 142.70-143.65 range. This is interesting as US yields (inverted TNOTE overlay on the chart) continue to move higher. Such development can be reasoned with uncertainty ahead of the Fed decision on Wednesday and BoJ decision on Thursday. 

  • Indices from Asia-Pacific traded lower today. Kospi dropped 1%, indices from China traded up to 0.9% lower and S&P/ASX 200 moved around 0.1% lower.
  • Liquidity during the Asian session was thinner as traders from Japan were off for holiday. Liquidity is also expected to be below-average in Europe as UK stock market will be shut for Queen Elizabeth II funeral
  • Joe Biden said that the US military would protect Taiwan in case of a Chinese invasion.
  • ECB Nagel said that more rate hikes will come in case current data trends continue
  • ECB Chief Economist Lane said that rate hikes will continue into 2023 and recession cannot be ruled out
  • Ethereum continues downward move following the Merge. Coin dropped over 5% over the weekend and continues to move lower on Monday
  • Moods on the overall cryptocurrency market are downbeat as well. Bitcoin drops 3.5% at press time and trades below $19,000 mark
  • Oil is trading little changed on Monday morning – Brent trades 0.2% higher while WTI trades flat at $85
  • Precious metals pull back as USD strengthens. Gold drops 0.3%, silver trades 0.7% lower and platinum slides 0.2%
  • USD and GBP are the best performing major currencies while CHF and NZD lag the most

Ethereum dropped to a 2-month low over the weekend and is testing $1,275-1,300 support zone now. Moods on the overall cryptocurrency market are poor as well with Bitcoin down over 3% and Ripple trading 7% lower.

  • RBA Governor Lowe said that he sees rates cycling between 2.5 and 3.5% (currently at 2.35%). Lowe also said that the Bank will consider 25 or 50 bp rate hike at next meeting
  • Chinese industrial production increased 4.2% YoY in August (exp. 4.0% YoY), retail sales were 5.4% YoY higher (exp. 3.9% YoY) and urban investments jumped 5.8% YoY (exp. 5.7% YoY)
  • South Korean unemployment rate dropped to a record low of 2.5% in August (previously 2.9%)
  • Cryptocurrencies are trading lower. Bitcoin drops 0.3% while Ethereum trades 1.1% lower
  • Energy commodities trade a touch higher. Brent gains 0.3% while WTI trades 0.2% higher on the day
  • Precious metals trade little changed – gold and silver drop 0.1%, platinum trades 0.2% lower and palladium trades flat
  • AUD and NZD are the best performing major currencies while CHF and CAD lag the most

S&P 500 (US500) has fully erased the recent jump and is now testing the 3,900 pts support zone. Selling intensified yesterday after the close of the Wall Street session as an earnings report from FedEx pointed to weakness in Asian and European business.

US indices finished yesterday’s higher but the scale of the move was nowhere near the scale of sell-off from the day before. S&P 500 gained 0.34%, Dow Jones moved 0.10% higher and Nasdaq jumped 0.74%. Russell 2000 gained 0.38%

Indices from Asia-Pacific traded mixed today – Nikkei and S&P/ASX 200 gained while Kospi and indices from China moved lower

DAX futures point to a more or less flat opening of the European cash session

ECB Chief Economist Lane said that rate hikes will be larger, the greater risks to the inflation and the wider the gap to the terminal rate. ECB Holzmann said that ECB response was delayed as the bank underestimated pace of inflation

White House said it is preparing a plan to keep supply chains active if planned rail strike goes ahead

Armenia and Azerbaijan reportedly reached a cease-fire agreement. However, it should be noted that a cease-fire agreement brokered by Russia two days ago was broken within hours

New Zealand GDP growth reached 1.7% QoQ in Q2 2022 (exp. 0.8% QoQ)

Australian employment increased by 33.5k in August (exp. 49.5k) while the unemployment rate ticked higher from 3.4 to 3.5% (exp. 3.4%)

Japanese exports increased 22.1% YoY in August (exp. 23.6% YoY) while imports were 49.9% YoY higher (exp. 46.7% YoY)

Cryptocurrencies are trading lower today – Bitcoin and Ethereum traded 0.2% lower. ApeCoin is an exception, trading 0.7% higher at press time

Energy commodities trade a touch lower on Thursday morning with Brent and WTI dropping around 0.3% each

Precious metals trade lower amid USD strengthening. Gold trades 0.4% lower while silver drop almost 0.9%

AUD and USD are the best performing major currencies while JPY and GBP lag the most

Gold took a hit as the USD resumed rally. Precious metal dropped below $1,700 handle and is approaching late-July low in the $1,680 area

Wall Street indices slumped yesterday following higher-than-expected CPI reading from the United States. S&P 500 dropped 3.94%, Dow Jones slumped 4.32% and Nasdaq plunged 5.16%. Russell 2000 dropped 3.91%

Money market prices in a 35% chance of a 100 basis point rate hike at the FOMC meeting next week. Implied policy rate for year’s end sits at 4.18%

Indices from Asia-Pacific moved lower following a bloodbath on Wall Street. Nikkei dropped 2.6%, S&P/ASX 200 plunged 2.4% and Kospi declined 1.3%. Indices form China traded up to 2.5% lower

DAX futures point to a lower opening of the European cash session today

Cryptocurrencies also took a hit following yesterday’s US CPI reading. Bitcoin dropped over 9% and revisited $20,000 area

EURUSD dropped back below parity levels. USDJPY once again tested 145 handle but has pulled back below 144 since

Gold plunged after US CPI reading and has been hovering around $1,700 since

US President Biden said he is not concerned with yesterday’s CPI report

Oil plunged along equities yesterday but has managed to recover some ground on media reports saying United States will start restocking strategic reserves once oil prices drops below $80 per barrel

Japanese industrial production increased 0.8% MoM in July (exp. 1.0% MoM). Machinery orders for July jumped 5.3% MoM (exp. -0.8% MoM)

API report on US oil inventories pointed to a 6.03 million barrel build (exp. -0.2 mb)

GBP and JPY are the best performing major currencies while AUD and USD

EURUSD slumped following the US CPI release yesterday. The pair broke below the lower limit of the market geometry and continued the move below parity levels. An attempt of breaking above 1.00 handle, marked with 200-hour moving average (purple line), was made this morning but bulls failed to push the pair above

  • Indices from Asia-Pacific traded higher at the beginning of a new week. Nikkei and S&P/ASX 200 gained 1%. Liquidity conditions were thinner as traders from China and South Korea were off for holidays
  • European index futures point to a higher opening of the cash session on the Old Continent today
  • Reuters reports that Biden Administration plans to further restrict semiconductor sales to China
  • According to Washington Post, White House is increasingly worried about looming energy crisis in Europe and is looking for ways to boost energy supplies to the Old Continent
  • Exit polls showed a very narrow lead of center-left block (currently ruling) in Swedish elections over right-wing block (49.8% vs 49.2%)
  • Iran deal still looks out of reach. E3 countries (France, UK and Germany) said that the latest demand from Iran cast doubts on whether the country really wants to restore the 2015 nuclear deal. Iran responded saying that E3 are damaging negotiations with such unconstructive statements
  • According to Reuters report, ECB will need to hike rates into restrictive territory in order to get grip of inflation
  • ECB’s Nagel signaled over the weekend that more rate hikes are needed. ECB’s Elderson said that rates need to rise despite risk of a recession
  • Cryptocurrencies are trading mostly higher at the beginning of a new week. Bitcoin gains 1.2% and trades near $21,700 while Ethereum drops 0.1%
  • Brent and WTI trade around 1% lower at press time. Gold pulls back 0.1% while silver gains 0.6%
  • NZD and AUD are the best performing major currencies while JPY and CHF lag the most

Oil is trading lower at the beginning of a new week. News on Russian price caps, Russian retaliation for it or lack of progress in Iran talks fail to lift crude prices signaling that worries over global growth are playing a key role now.