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Charting the Markets: 30 June

Indices are under pressure as the first half of the year draws to a close. USD/JPY's ascent has paused while EUR/USD and EUR/GBP slip. And gold and oil are under pressure as platinum fights to hold support.

 

This is here for you to catch up but if you have any ideas on markets or events you want us to relay to the TV team we’re more than happy to

[MongiIG]

Market data to trade on Friday: USD/JPY; China A50

Join IGTV’s Daniela Sabin Hathorn as she looks at charts of USD/JPY and China A50 ahead of the latest economic data out on Friday, including the Tokyo CPI and Caixin manufacturing PMI.

 

 

 

 

[MongiIG]

For more up to date news on how markets will open, the latest earnings and economic news, watch IGTV live in the platform at 07:30am UK.

Today’s coverage:

 

Indices: Europe to open down after a negative end to June. Same direction across APAC (apart a rise in AUS) and Wall St which saw S&P down 21% in H1 worst performance since 1970. NDAQ down 30%. UKX down just 5% in H1  

FX: ¥ up for a second day despite Tanken qtly report undershooting.   

Equities: MU fell 3¼% last night all-sessions after fiscal Q3. TSLA worst qtly stk performance ever, AMZN worst since .com bust in 2001

Commods: Gold breaks nominal support to trade at 16 May lows.  Oil 4^th week of decline. Copper breaks support to go to Feb 2021 lows other base metals also down

 

https://community.ig.com/igtv/

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Early Morning Call: S&P 500 down 21% in H1; Nikkei down; Micron shares drop

Europe to open down after a negative end to June, same direction across APAC and Wall Street which saw S&P down 21% in H1 in worst performance since 1970; NDAQ down 30%; UKX down 5% in H1. MU falls 3¼% after fiscal Q3.

 

 Jeremy Naylor | Writer, London | Publication date: Friday 01 July 2022 

Indices outlook

US indices ended yesterday's session lower, embodying their performance since the start of the year.

The US 500 plunged 21% in the first half (H1) of 2022, its worst performance since 1970. The US Tech 100 ended this period down 30%, a drop not seen since 2002.

In the Asia-Pacific region, indices were mostly down. After trading higher for most of the session, the Australia 200 closed down 0.43%. The Japan 225 led losses, after the Bank of Japan's (BoJ) Tankan large manufacturers index fell to nine in the second quarter of 2022, from 14 in the previous three months. That is below expectations of 13 and its lowest level since March 2021. Additionally, May's unemployment rate unexpectedly rose to 2.6% from 2.5% the previous month.

Meanwhile in China, Caixin manufacturing PMI rose to 51.7 in June from 48.1 in the previous month, marking the first expansion in four months, and well above analysts' forecast of 50.1.

In Europe, indices started the third quarter the way the ended the second. The first half of the year has also been very difficult for European equities. STOXX Europe 600 fell 17%, recording its worst half since 2008. The FTSE 100, however, only lost just over 5% in the period.

Currencies

On the currency market, EUR/USD is heading for a weekly loss, after hitting a two-week low yesterday.

The currency pair could react to the release of the Eurozone consumer price index (CPI), expected to rise by 8.4% in June on a year-on-year basis.

On Wednesday, Germany CPI came in at 8.2% lower than the 8.8% expected, because of the German government's subsidies on train fares and lower fuel taxes. In France, CPI was in line with expectations at 6.5%.

At 3pm UK, ISM manufacturing PMI is forecast to remain in expansion in June but down from last month to 54.9.

Equities

Micron Technology Inc (All Sessions) shares fell in extended trading after the memory chip firm revealed a weaker-than-expected forecast.

Micron posted earnings of $2.59 per share, higher than the $2.46 anticipated, and revenue came in marginally lower than forecast at $8.64 billion.

But, the group said it expects adjusted revenue for the current quarter at $7.2 billion, plus or minus $400 million, saying that China's lockdown is causing a 30% drop in Micron's China revenue for the current quarter, and accounts for a 10% drop in total revenue. Analysts' outlook was an average of $9.05 billion. The company expects adjusted profit for the quarter of $1.63 per share, plus or minus 20 cents, compared with estimates of $2.57 per share.

The outlook for memory chip makers has worsened in recent months due to surging inflation, China's cooling economy, the Russia-Ukraine war., among others. Consumer spending on smartphones and personal computers has been hit, which has driven down chip prices and led to a build-up of inventories.

Micron said it will reduce spending on manufacturing of chips in fiscal year 2023, without providing any numbers.

Commodities

On the commodity market, oil prices are on track for a fourth straight week of declines.

Little came out of OPEC+ meeting yesterday. The organisation confirmed the 648,000 barrels per day (bpd) oil production increase for August. This decision is largely symbolic since most members hve been unable to raise their production in recent months, adding significantly less oil to the market than promised.

Last Friday, Baker Hughes total rig count increased by 13 to 753. As usual, this rise was mainly due to the increase in the number of oil rigs in operation, up to 594 from 584. The number of operating gas rigs increased by three to 159.

Industrial metals are also falling today. Like Oil - US Crude or Oil - Brent Crude, Copper is set for a fourth consecutive week of losses, now trading at levels not seen since February 2021.

And after recording its worst session since April yesterday, Zinc continues to fall, now at its lowest level since October 2021.

Spot Gold has fallen for a sixth consecutive day, now trading at a six-week low.

 

This is here for you to catch up but if you have any ideas on markets or events you want us to relay to the TV team we’re more than happy to.

[MongiIG]

Charting the Markets: 1 July

FTSE 100, DAX and S&P 500 all suffering losses. EUR/USD and EUR/GBP stabilise while GBP/JPY slips. And natural gas sees worst monthly drop in over three years while oil and gold also slide.

 

 

 

This is here for you to catch up but if you have any ideas on markets or events you want us to relay to the TV team we’re more than happy to.

[MongiIG]

For more up to date news on how markets will open, the latest earnings and economic news, watch IGTV live in the platform at 07:30am UK.

Today’s coverage:

 

Indices: Europe to open slightly higher, adding to Friday’s gains. No US mkts today APAC mixed  

FX: EURUSD down for a second day ahead of German trade and EZ PPI  

Equities: TSLA poor Q2 deliveries after China covid lockdowns and supply chain issues. Also TSLA writes down BTC exposure (no US equity trade today)

Commods: Gold up after hammer candle took it down below recent support. Oil up 2^nd day in a row  

 

https://community.ig.com/igtv/

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Early Morning Call: recession fears dominate; metals downtrend; Tesla deliveries fall

Europe to open slightly higher adding to Friday’s gains; APAC mixed; US markets closed. Tesla sees poor Q2 deliveries amid China's Covid lockdowns, supply chain issues. Gold up after falling below recent support.

 

 Jeremy Naylor | Writer, London | Publication date: Monday 04 July 2022 

Indices outlook

US indices closed last Friday’s session on a positive note, with the US Tech 100 ending a five-day losing streak. US markets are closed today for Independence Day, but indices remain open on IG's 24-hour markets.

In the Asia-Pacific region, trading was mixed. The Japan 225 and Australia 200 closed higher while the Hong Kong HS50 remained in negative territory.

Europe indices started the day higher. Germany recorded its first seasonally-adjusted trade deficit since the early 1990s. Eurozone producer price index is coming in at 10am. Economists see it rising 1.3% in June month-on-month (MoM), up 37.1% year-on-year (YoY).

The US Dollar Basket dropped back below 105 on Friday evening. Earlier in the day it climbed to a two-week high after inflation in the Eurozone hit a new record. Consumer price index (CPI) rose 8.6% in May YoY.

Two macroeconomic events could test the greenback this week: the Federal Open Market Committee (FOMC) minutes on Wednesday, and Friday's non-farm payrolls (NPP). Early polls show that economists expect 270,000 jobs were added in June, down from 390,000 in May. The unemployment rate should remain at 3.6%. Note that ADP said last week it would suspend the release of its private sector survey for approximately the next two months. ADP says it wants to revamp this survey and make it "a more robust, high frequency view of the labour market."

Equities

Tesla Inc reported on Saturday that it delivered 254,000 vehicles in the second quarter (Q2), while up 27% YoY, the Chinese shutdowns brought the company's first back-to-back quarterly drop in more than two years.

This figure was well below the 350,000 estimated by analysts, although some had already started cutting their expectations after CEO, Elon Musk, warned that it was likely to be roughly level with Q1 which came in at 310,000 deliveries.

Tesla is also facing a $440 million writedown on its bitcoin holdings after a slump in the digital currency's value. The carmaker bought $1.5 billion worth of bitcoin early last year in a radical move that made it the biggest company to move part of its cash reserves into cryptocurrency.

Commodities

Oil prices are down this morning, paring gains from the previous session.

If supplies remain tight, global recession fears weigh on energy and material sectors. Last Friday, the Baker Hughes total rig count fell by three to 750. It was all due to a drop in the number of gas rigs in operation, falling by four to 155. The number of working oil rigs rose by one to 595.

The Australian government announced overnight that it sees export revenues at its mining and energy sectors to climb 3% to a record $419 billion in the year to June 2023, buoyed by surging coal and gas prices.

Copper is hovering around $8,000, after recording its fourth straight week of declines. Since its record high set early in March, copper has dropped by nearly 27%.

Platinum is down again this morning, testing the new 20-month low set on Thursday.

Spot Silver (5000oz) is trading at near two-year lows.

 

 

This is here for you to catch up but if you have any ideas on markets or events you want us to relay to the TV team we’re more than happy to.

[MongiIG]

Charting the Markets: 4 July

The long-term downtrend for indices persists - we look at the FTSE 100, DAX and Nasdaq. USD remains king for now - EUR/USD; USD/JPY; AUD/USD. And platinum shorts the order of the day as gold also takes part in the drop in metals.

 

 

This is here for you to catch up but if you have any ideas on markets or events you want us to relay to the TV team we’re more than happy to.

[MongiIG]

Market data to trade on Tuesday: AUD/USD; CAC 40; SBRY

The Reserve Bank of Australia (RBA) will take the stand again on Tuesday to deliver its latest rate hike, but how big will it be?

Markets are leaning towards a 50bps hike and Daniela Sabin Hathorn has the latest on the AUD/USD chart.

She also looks at a chart of the CAC 40 and Sainsbury's (SBRY).

 

 

 

[MongiIG]

For more up to date news on how markets will open, the latest earnings and economic news, watch IGTV live in the platform at 07:30am UK.

Today’s coverage:

 

Indices: US markets back after long weekend SPX & INDU highest in a week on 24hr mkts. UKX to open up for 3^rd day while DAX & CAC mixed. APAC mostly higher

FX: AUDUSD holds Monday’s gains as RBA raises rates by 50bps for 2^nd time in a row.  USDCNH after Caixin services PMI data in steepest rise since July 2021.  

Equities: Earnings – SBRY. Watching all-sessions reaction on TSLA stk on poor sales data and BTC write down  

Commods: Oil holding the gains over the last two days. Gold barely moved. Coffee Robusta, NY Sugar & wheat all under pressure as good growing weather boosts supply

 

https://community.ig.com/igtv/

[MongiIG]

Early Morning Call: RBA rate hike erases AUD gains; Sainsbury's trading statement

AUD/USD holds Monday’s gains as RBA raises rates by 50bps for a second time. Earnings from Sainsbury's today; also watching all-sessions reaction on TSLA stock following poor sales data and BTC write down.

 

 Jeremy Naylor | Writer, London | Publication date: Tuesday 05 July 2022 

APAC outlook

Asia-Pacific (APAC) equity markets closed higher, led by the Japan 225 ending the session up 1.03%. The Australia 200 rose by 0.25%.

As expected, the Reserve Bank of Australia (RBA) increased its cash rate by 50 basis points (bps) to 1.35%, back to its highest level since May 2019. The Australian dollar lost some ground against the greenback at the announcement, erasing the gains it had made prior to the decision.

In China, Caixin services PMI rose to 54.5 in June, marking the first expansion in the sector in months, and the sharpest rise since July 2021. Japan Jibun bank services PMI shows the activity in the sector rose to 54 - its highest level since 2013. Later this morning, S&P Global PMI final data for May will be released in Europe.

In Taiwan, the world's largest contract electronics maker, Foxconn reported an overnight jump in sales of 31% in June year-on-year (YoY), and raised its full-year business outlook, citing strong sales of smartphones and servers, despite rising inflation and slowing demand concerns.

Indices

European indices opened higher, after a positive session yesterday for the FTSE 100 and CAC 40. Germany’s DAX 40 fell 0.31% after the country recorded its first seasonally-adjusted trade deficit in more than 30 years.

In the US, equity markets will reopen after Independence Day. At 3pm, factory orders are expected to rise by 0.5% on May month-on-month (MoM).

Equities

Sainsbury's trading statement shows that first quarter (Q1) like-for-like sales excluding fuel were down 4% in last 16 weeks. Clothing sales fell 5% in the last 11 weeks, after a drop of 30% in the first five weeks.

There are similar patterns at Argos: down 7% in the last 11 weeks and -19% in the first five weeks of the quarter.

Also watch out for Tesla at the open, at 9am on the IG all-sessions stock market. The electric carmaker reported on Saturday that it delivered 254,000 vehicles in the second quarter, its first back-to-back quarterly drop in more than two years. This was well below the 350,000 estimated by analysts.

Tesla is also facing a $440 million write-downs on its bitcoin holdings after a slump in the digital currency's value. The carmaker bought $1.5 billion worth of bitcoin early last year in a radical move that made it the biggest company to move part of its cash reserves into cryptocurrency.

Tesla reports earnings on Wednesday 20 July.

Commodities

On the commodity front, European gas supply is under added pressure. Today Norwegian offshore workers begin a strike, asking for wage hikes to compensate for rising inflation.

Metal prices remain weak. Copper remains below $8,000. Zinc remains near its recent lows but is up for a second straight day, a first in five weeks.

After a longer weekend than usual in the US, we'll see later on if Chicago Wheat and Corn prices continue to drop. Last week was a second straight week of heavy declines for grain prices in the US, on rising hopes that end-of-summer harvests would be plentiful, not only in the US, but in Europe and Australia.

 

 

This is here for you to catch up but if you have any ideas on markets or events you want us to relay to the TV team we’re more than happy to.

[MongiIG]

Charting the Markets: 5 July

FTSE 100, DAX and S&P 500 looking for gains as US returns from holiday. AUD/USD recovers post RBA rate hike while EUR/USD and EUR/GBP range trade. And Brent crude oil pauses ascent as gold and natural gas little changed.

 

 

This is here for you to catch up but if you have any ideas on markets or events you want us to relay to the TV team we’re more than happy to.

[MongiIG]

Market data to trade on Wednesday: DAX 40; EUR/USD; TPT

Join IGTV’s Daniela Sabin Hathorn as she looks at charts of the DAX 40, EUR/USD, and Topps Tiles (TPT) ahead of the latest economic and corporate data out on Wednesday.

 

 

 

[MongiIG]

For more up to date news on how markets will open, the latest earnings and economic news, watch IGTV live in the platform at 07:30am UK.

Today’s coverage:

 

Recession worries return smashing markets

Indices: Big recovery late in the day on Wall St saw SPX & NDQ close higher. Europe to open up after big declines yesterday on recession fears. Losses overnight in APAC. Interestingly UKS rose during period of cabinet resignations

FX:  USD is king vs most areas. DXY near 20yr high. EURUSD heading for parity? GBPUSD nearing Covid lows  

Equities: Earnings – TPT REDD

Commods: Gold crashes through support base metals all down, Brent challenging $100 and agri commods all down at recent lows. BTC holding up above $20,000

 

 

[MongiIG]

Early Morning Call: recession worries return; oil prices pare losses

Recession fears return hitting markets. Big late recovery on Wall Street saw SPX, NDQ close higher; Europe to open up after big declines; losses overnight in APAC. USD is king versus most currencies. Brent challenging $100.

 

 Jeremy Naylor | Writer, London | Publication date: Wednesday 06 July 2022

Recession fears return, hitting markets

Once again, recession fears took over the markets yesterday.

On the equity front, Europe was the most affected, with the FTSE 100 and DAX down by nearly 3%.

It was also a negative session in the Asia-Pacific region. The Nikkei lost 1.20%. Australia’s ASX 200 was the best performer of the day, only losing 0.53%.

Volatility has now dropped after yesterday’s spike, and Europe indices are paring part of yesterday losses. Traders will look out for Topps Tiles at the open, after the group reported a 9.2% rise in sales, and AO World which is planning the placing of new ordinary shares at the price of 43 pence per share.

FX overview

On the FX market, the dollar was once again the risk-off currency of choice.

EUR/USD set a new two-decade low, GBP/USD hit $1.19 for the first time since March 2020, and AUD/USD set a new two-year low yesterday. The US Dollar Basket climbed up above 106 for the first time since December 2002.

In Germany, factory orders unexpectedly rose by 0.1% in May compared to April. Economist had forecast a 0.6% drop.

EUR/USD could be tested again tonight with the release of Federal Open Market Committee (FOMC) meeting minutes.

Also, at 10am, Eurozone retail sales are expected to rise by 0.4% in May on a month-on month (MoM) basis. Later this afternoon, traders await ISM non-manufacturing PMI, forecast to fall to 54.3 in June, from 55.9 in May.

Commodities outlook

The commodity market was not spared.

Oil prices tumbled yesterday afternoon. WTI lost $10 in a matter of five hours and is now hovering around $98.

Meanwhile, oil workers in Norway ended their strike after one day. The Norwegian government didn't take long to step in to avoid cutting the country's gas exports by almost 60% which would have worsened Europe's energy supply crunch. If the strike had continued, Britain would not have received any piped Norwegian gas from Saturday.

Yesterday the British wholesale gas price for day-ahead delivery jumped by nearly 16%.

Gold fell sharply yesterday, losing more than $40 and setting a new year-to-date low. Other precious metals followed suit, with silver falling back below $20 for the first time in two years, and platinum dropping to a 19-month low.

Renewed concerns on global growth sent industrial metals lower, as traders fear for demand. Copper now trades below $7,500 a tonne, a new 19-month low. Iron ore, aluminium and zinc were also impacted.

 

This is here for you to catch up but if you have any ideas on markets or events you want us to relay to the TV team we’re more than happy to.

[MongiIG]

Charting the Markets: 6 July

Growth concerns take hold of indices once again. The US dollar's dominance continues. And WTI slips below $100 per barrel.

 

 

 

This is here for you to catch up but if you have any ideas on markets or events you want us to relay to the TV team we’re more than happy to.

[MongiIG]

For more up to date news on how markets will open, the latest earnings and economic news, watch IGTV live in the platform at 07:30am UK.

Today’s coverage:

 

Indices: Mostly higher, Europe expected up at the start… all this despite FOMC minutes and IMF highlighting the need for higher rates

FX: USD remains strong after the FOMC minutes indicated more big rise in US rates to come.  AUDUSD climbs after expanded Aussie trade surplus  

Equities: Earnings PSN CURY JDW. Watching  IAG as BA cancels a further 10,300 flights this summer

Commods: Oil up after 3mth lows. Gold 10mth lows. Coffee Robusta 11mth lows

 

 

 

[MongiIG]

Early Morning Call: Indices mostly higher; BA cancels more flights; gold at 9-month low

Indices are mostly higher despite FOMC minutes and IMF highlighting the need for higher rates. Watching IAG as British Airways cancels a further 10,300 flights this summer. And oil up after 3-month lows, gold at 9-month lows.

 

 

 Jeremy Naylor | Writer, London | Publication date: Thursday 07 July 2022 

Indices outlook

Indices in the Asia-Pacific region mostly rose overnight, led by a similar performance stateside.

Markets seem to appreciate the clarity and consistency of the message delivered by financial leaders. The Federal Reserve (Fed) minutes reiterated yesterday that a “more restrictive stance” in policy will be suitable until inflation targets are reached. The document said that “participants recognised that policy firming could slow the pace of economic growth for a time, but they saw the return of inflation to 2% as critical to achieving maximum employment on a sustained basis.”

In terms of what's expected, members said the July meeting would likely see another 50- or 75-basis point (bps) move. International Monetary Fund (IMF) director, Kristalina Georgieva, while warning of a possible global recession, expressed her support towards central bank actions by saying that slower economic growth may be a "necessary price to pay", as there is a pressing need to restore price stability.

In Europe, equity markets opened in positive territory, following a solid performance yesterday. France’s CAC 40 outperformed main indices in the region, closing 2.03% higher.

In Australia, trade surplus widened in May to a record high of $16 billion, easily beating market forecasts of a $10.7bn surplus. Exports rose more than imports, helped by soaring commodity prices. Exports increased by 9.5% month-on-month (MoM) to a fresh record of $58.4bn, while imports increased by 5.8% MoM, also to a new record of $42.4bn. The Australian dollar reacted positively to the news.

In Germany, industrial production rose by 0.2% in May on a month-on-month basis, below economists’ expectations of 0.4%. At 1.30pm look out for initial jobless claims. Economists expect 230,000 new claimants for last week, a figure that has been creeping up since the March low. The last four weeks' data has been oscillating between 231,000 and 232,000.

Equities

Persimmon released a trading update showing total revenue of £1.69bn for the first six months of the year (H1), lower than the £1.84bn of H1 last year, with forward sales marginally higher than last year.

Currys' adjusted profit before tax rose to £186 million, while like-for-like revenue fell 3%. The group proposed a final dividend of 2.15 pence, taking total dividend to 3.15 pence, up 5%.

British Airways (BA) has cut a further 10,300 short-haul flights between August and October, which means the airline will drop almost 30,000 flights during the summer season.

In the US, Levi Strauss is reporting tonight after market close. Analysts expect a mixed report. On one hand, the company has seen recent robust demand for its products as people return to the shops. But on the other, given the worsening economic situation, consumers are poised to tighten their spending on discretionary products, which include clothing and accessories. Earnings per share (EPS) is expected at 23 cents on revenue of $1.43bn but, as with other earnings, it's likely to be all about the outlook.

Commodities

On the commodity front, gold recorded a second day of heavy losses yesterday. The precious metal is trading higher this morning, but remains at levels not seen since October 2021.

Oil prices are rising this morning, paring some of yesterday afternoon’s losses. The American Petroleum Institute (API) yesterday evening reported an increase in crude oil stocks of 3.8 million barrels last week, when oil analysts had expected a decrease of 1.1 million barrels.

Gasoline inventories fell by 1.8 million barrels, while distillate stocks fell by 635,000.

 

 

This is here for you to catch up but if you have any ideas on markets or events you want us to relay to the TV team we’re more than happy to.

[MongiIG]

Charting the Markets: 7 July

European indices open higher for second consecutive day. EUR/USD and GBP/USD break lower, as USD/JPY look to break higher. And gold, oil and cotton prices tiptoe higher after heavy losses.

 

This is here for you to catch up but if you have any ideas on markets or events you want us to relay to the TV team we’re more than happy to.

[MongiIG]

Market data to trade on Friday: USD/JPY; WTI

With a lighter economic calendar on Friday, Daniela Sabin Hathorn looks at charts of USD/JPY and US crude (WTI) ahead of the non-farm payrolls and Baker Hughes rig count.

 

 

[MongiIG]

For more up to date news on how markets will open, the latest earnings and economic news, watch IGTV live in the platform at 07:30am UK.

Today’s coverage:

 

Indices: Ending out a strong week, indices looking ahead to US jobs data. Europe expected to open mixed. Gains seen across APAC region

FX: Watching USD ahead of the US jobs data DXY hitting another new near 20yr high.  JPY stronger as flight to safety trade following shooting of former Japan PM Shinzo Abe

Equities: Reports say Musk deal to buy TWTR looking increasingly doubtful. LEVI up 4% last night on good earnings  

Commods: Gold up for a 2^nd day. Oil up for 2^nd day. Lumber back on an uptrend. Coffee Robusta further 11mth lows

 

 

 

[MongiIG]

Early Morning Call: markets hold gains; watching USD ahead of NFPs

Ending out a strong week, indices are looking ahead to US jobs data. Watching USD ahead of that data with DXY hitting another new near 20-year high. Reports say Musk deal to buy TWTR looking increasingly doubtful.

 

 

 

This is here for you to catch up but if you have any ideas on markets or events you want us to relay to the TV team we’re more than happy to.

[MongiIG]

Charting the Markets: 8 July

FTSE, DAX and Dow push higher ahead of latest US jobs report. EUR/USD, GBP/USD and AUD/USD in further falls. And gold, oil and copper stabilise ahead of US unemployment data.

 

 

This is here for you to catch up but if you have any ideas on markets or events you want us to relay to the TV team we’re more than happy to.

[MongiIG]

For more up to date news on how markets will open, the latest earnings and economic news, watch IGTV live in the platform at 07:30am UK.

Today’s coverage:

 

Indices: On the way down in Europe. Overnight China worst performer as authorities fine several companies for anti-monopoly practices. Wall St opens the week on the back foot  

Equities: TWTR hires legal firm to force Musk on $44bln deal or pay $1bln break fee

FX: USDJPY new 24yr high. Parity for EURUSD now just 1½ cents away could data this week bring it 1-1?  

Commods: Gold holds much of last week’s drop. Oil stalls after 2 days of gains. Lumber halts a 10day bull trend

 

 

 

[MongiIG]

Early Morning Call: USD strength continues; Twitter to sue Musk; US earnings season

USD/JPY at new 24-year high; parity for EUR/USD now just 1½ cents away - could data this week bring it 1-1? Twitter hires legal firm to force Musk on acquisition deal or pay $1bln break fee. And indices on the way down in Europe.

 

 Jeremy Naylor | Writer, London | Publication date: Monday 11 July 2022 

Indices outlook

There was a mixed start to the week in the Asia-Pacific region.

Hong Kong’s Hang Seng was the worst performer as China-imposed fines on several companies that failed to comply with anti-monopoly rules. Japan led gains in the region as the country’s ruling coalition is set to reinforce its majority in the upper house of parliament, according to NHK.

Last Friday the Dow and S&P 500 ended lower, but the Nasdaq 100 rose for a fifth day, its longest streak since November 2021.

Equity markets in Europe opened lower. A couple of central banks will decide on rates this week, both on Wednesday 13th.

The Reserve Bank of New Zealand (RBNZ) is expected to hike by 50 basis points (bps) to 2.5%, back to levels not seen since 2016. The RBNZ was among the first central banks to start hiking rates. Up to October last year, the bank's official cash rate was at 0.25%. This expected rate hike will be the sixth in a row.

Then later on in the day, it's the turn of the Bank of Canada (BoC). It began its hiking process a bit later but ranks as one of the highest rates in the world's main economies. Economists see a rate increase of 75 basis points, which would take the bank's overnight rate to 2.25%. Up to January this year, the BoC 'srate was at 0.25%.

Forex

EUR/USD is trading near two-decade lows.

Later this week, the pair could react to the release of US consumer price index (CPI). Economists expect it to rise by 8.8% in June on the same month a year ago, a pace not seen since December 1981.

US earnings season

US earnings season starts officially this week and, as ever, the banking sector gets the ball rolling.

JPMorgan and Morgan Stanley will publish their quarterly report on Thursday, and Citigroup , Wells Fargo, BNY Mellon on Friday.

Bank of America and Goldman Sachs then pick up the baton on Monday next week.

Outside the banking sector, PepsiCo will report on Tuesday 12th. Later this week the market expects publications from Delta Air Lines, ConAgra Brands and UnitedHealth .

Earnings in the US are expected to rise 4.1%, which would be the lowest rate of growth since the fourth quarter (Q4) of 2020. Revenues are expected to rise 10.1% compared to a year earlier. As for negative guidance, they should be on the rise. With soaring inflation and the pressure it puts on profit margins, bleak expectations about economic growth and consumer spending, 71 firms are expected to announce negative earnings guidance.

Twitter will gather a lot of attention today. On Friday, Tesla CEO, Elon Musk, said he planned to walk away from his deal to buy the social media platform, arguing that it had failed to provide enough information to prove that the number of fake and spam accounts on its platform stands at less than 5%, as it has long estimated.

Over the weekend, Twitter announced it had hired law firm Wachtell, Lipton, Rosen & Katz as it prepares for a legal battle either to force Musk to proceed with the $44 billion deal or pay the $1bln break fee.

Commodities

Oil prices are little changed this morning.

Last Friday, Baker Hughes total rig count rose by two to 752. But after last week's drop, rig count remains below its level from a fortnight ago.

Last week's rise was entirely due to the increase in oil rigs in operation, up by two to 597. The number of working gas rigs remains at 155.

In Europe, Nord Stream 1, the pipeline that carries Russian gas to Germany, is due to stop operating today for the next ten days. This is a scheduled annual maintenance, but markets and governments fear the shutdown could last longer because of the war in Ukraine.

Traders will be attentive to the price of lumber, as the commodity recorded a second week of strong gains, and was the best-performing asset amongst indices, FX and commodities.

Is that just a respite, or the start of a longer period of strength for the commodity? The recent two-week recovery comes off the back of a long period of seasonal decline, but crucially not below the key $460 support level established in August 2021.

Besides, with the price now on the rise for the past four weeks, there is a strong chance we have seen the bottom established here.

 

 

 

This is here for you to catch up but if you have any ideas on markets or events you want us to relay to the TV team we’re more than happy to.

[MongiIG]

Charting the Markets: 11 July

IGTV's Jeremy Naylor caught up with Serge Berger from TheSteadyTrader.com. He analysed the EUR/USD parity trade and whether more 24-year highs were to come with USD/JPY. He also looks at DAX, S&P 500 and Brent.

 

 

This is here for you to catch up but if you have any ideas on markets or events you want us to relay to the TV team we’re more than happy to.

[MongiIG]

Market data to trade on Tuesday: EUR/GBP; DAX; PepsiCo

Join IGTV’s Daniela Sabin Hathorn as she looks at charts of EUR/GBP, the DAX 40, and PepsiCo ahead of the latest economic and corporate data out on Tuesday the 11th of July.

 

 

 

[MongiIG]

For more up to date news on how markets will open, the latest earnings and economic news, watch IGTV live in the platform at 07:30am UK.

Today’s coverage:

 

Indices: Mkts down for a second day, Europe expected to open lower.

FX: A surging USD continues to dwarf pretty much all comers. USDJPY another 24yr high, EURUSD perilously close to parity, GBPUSD 28mth low 

Equities: PEP Q2 earnings today. Watch UK retail after BRC sales monitor indicated a bigger fall in June than expected

Commods: Gold hits Sept 2021 support at $1721 and bounces.  Copper nudging 32mth low. Oil down for a second day

 

 

 

[MongiIG]

Early Morning Call: EUR/USD on the brink of parity; oil, base metals down

A surging USD continues to dwarf pretty much all comers; EUR/USD perilously close to parity; GBP/USD at 28-month low; USD/JPY hits another 24-year high. Gold hits September 2021 support at $1721 and bounces.

 

 Jeremy Naylor | Writer, London | Publication date: Tuesday 12 July 2022 

Indices outlook

Japan led losses in Asia-Pacific region today, following a negative session in the US yesterday.

The Nasdaq ended a five-day winning streak by posting a fall of 2.26% yesterday. Japan producer price index rose by 0.7% in June compared to May. Year-on-year (YoY), the index increased by 9.2%.

In Australia, NAB business confidence fell more than expected to one in June, from six the previous month.

In Europe, equity markets opened in the red, remaining on Monday’s path. In the UK, the BRC retail sales monitor fell more than expected, by 1.3% in June compared to June last year, and contracting for the fourth straight month.

British Retail Consortium chief executive, Helen Dickinson, said “sales volumes are falling to a rate not seen since the depths of the pandemic, as inflation continues to bite and households cut back spending,”

Behaviour is also changing. Consumers are attracted to cheaper brands when it comes to food, and postpone purchases of kitchen appliances and homeware. All these macro-economic indicators support the dollar.

Forex

This morning USD showed gains against most of the major currencies.

The Australian dollar remains at a two-year low, as energy and commodity prices fall under the pressure of new China Covid curbs. Only the Japanese yen marginally rose against the greenback.

One currency pair has attracted most f traders’ attention. EUR/USD is now just a few pips away from parity, and it is very unlikely the trends will stop these. Economic headwinds for the eurozone are at hurricane force. Yesterday the much-awaited day arrived: Nord Stream 1 was shut off for routine maintenance until 21 July. The maintenance period has stoked speculation around the possibility of Russia delaying the resumption of gas flows once maintenance has been completed.

Add this to rising inflation, the serious risk of recession and hawkish rhetoric from the European Central Bank (ECB) wanting to turn off the money taps.

Today is German ZEW day. Economic sentiment is forecast to drop by 10 points to -38.

Commodities

Fears of a global economic slowdown continue to weigh on oil prices.

This morning WTI is on its way down towards $100 per barrel. China, the world’s largest crude importer, is also dragging prices down with new Covid restrictions that could affect demand.

Elsewhere on the commodity market, WTIgold is getting closer to September 2021 support at $1,721 and silver hit a new two-year low.

 

 

This is here for you to catch up but if you have any ideas on markets or events you want us to relay to the TV team we’re more than happy to.

[MongiIG]

Charting the Markets: 12 July

FTSE, DAX and Dow start to head lower after recent respite. Flight to the dollar pushes down EUR/USD, GBP/USD and AUD/USD. And gold, silver and oil drop on recession fears.

 

 

This is here for you to catch up but if you have any ideas on markets or events you want us to relay to the TV team we’re more than happy to.