The Morning Hark - 26 July 2022
Today’s focus……..A slow day for news, with Richmond fed and US new home sales both at 15:00BST
Daily roundup - all prices are at 7.30 BST (British Summer Time) with changes reflecting movement from midnight BST
Oil – Both Brent and Crude are up on the day, sitting at 106.80 and 98.20 respectively. Rising on the back of supply issues in energy sectors. Nordstream 1 on wires again as Russia said supply would be cut again from 40% to 20% for more maintenance. That comes after German regulator said yesterday that if gas supply continues at this low level the 95% target for gas storage will not be met by winter.
EQ – Equities are a mixed bag today with Nikkei down smalls at 27,655 and Hang Seng up 1.7% at 20,920. The KOSPI sits at 2414, up 0.20%
The US futures are lower with the Nasdaq and S&P trading at 12,305 and 3955 respectively. Walmart shocked the market last night with an earnings/profit warning after the close. With the FOMC tomorrow and over 50% of the S&P market cap to report earnings this week, volatility should pick up from tomorrow.
Gold – Gold trades at $1721 sitting in the middle of its Asia range. FOMC has it on hold.
FI - US yields have done very little in Asia trading with the 10yr sitting at 2.790 and 2yr at 3.0200. BOJ minutes came out showing a predictable unanimous desire to keep the YCC. No decision was taken about extending it either. The decision to extend or end the programme will be taken in the September meeting. New BOJ member Takata spoke yesterday and showed his stance was to not rock the boat and keep the BOJ advice on yields.
ECB’s Kazak on wires yesterday saying 50bp still on table for the next meeting. Eur popped as bunds sank but the move was quickly reversed.
FX – A quiet Asia session so far following on from a volatile but ultimately not very interesting day yesterday. USD JPY sits at its opening level as does EURUSD.
Others – Asia sold Bitcoin and Ethereum again today. They are trading at 21,140 and 1430 respectively.
ETH has respected the double top at 1640 and broken 1500.
We now see 1330 as a buying area.
German IFO was released yesterday and showed a depressing dip with consensus at 90.2 and 83 for business climate and expectation respectively. They hit the wires at 88.6 and 80.3
EURUSD tried to dip on the release but was quickly bought perhaps showing that USD reduction into the FOMC is still in play.
The two candidates for the vacant UK prime minister role went head-to-head in a TV debate yesterday evening. Truss came out on top and still leads the race for the job. This is the first of several debates over the next few weeks and while the prime ministerial outcome is not yet known, what we can know for sure is that viewing figures for these public arguments will already have peaked. A write up from politico is linked below.
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📅⠀The main highlights for the week ahead in terms of data and speakers:
US New Home Sales Jun consensus 0.66M vs previous 0.696M (15.00 BST)
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🔥⠀Top 5 trending posts on Harkster.com yesterday:
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Pepperstone - A traders’ week ahead playbook – the emerging case for gold appreciation
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📚⠀Further reading on the current key macro themes:
Pepperstone - FOMC preview – assessing the balance of risk for traders
Politico - 5 things we learned when Liz Truss and Rishi Sunak went head-to-head on primetime TV
Politico - UK’s Tory hopefuls square up for primetime TV clash
ZeroHedge - Rabobank: Welcome To Europe's New (Ab)normal
ABM AMRO - ECB’s new tool gives it green light for faster normalisation
ZeroHedge - Euro Tumbles, Spreads Blow Out As Market Realizes ECB's TPI Is Just Another Useless Word Salad
Apricitas - The EU's Hamiltonian Moment
Fox Business - Treasury Sec. Janet Yellen acknowledges economic ‘slowdown’ but downplays recession fears
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