01.07.22 Macro Morning
Chris Becker | Jul 01, 2022 09:53
Risk sentiment continued to lack confidence overnight as downward volatility returned to equity markets as Wall Street fell nearly 1% in the wake of poor consumer spending data, while European stocks sold off as German unemployment spiked unexpectedly. The USD didn’t benefit as much as expected on the defense, with Euro surging, also helped by a higher than expected French CPI, while the Australian dollar remained depressed below the 69 handle with a very small uplift. Bond markets saw more retracement in yields, with 10 Year Treasuries pulling back below the 3% level as interest rate futures moderated once again, with “only” 180 bps suggested rate rises by the Fed this year. Commodity prices were also mixed, with oil prices down more than 2%, iron ore off by more than 3% while gold continued to deflate, almost crossing below the $1800USD per ounce level.
Looking at share markets in Asia from yesterday’s session, where mainland Chinese share markets stood out by doing quite well as the Shanghai Composite closed more than 1.1% higher to 3398 points while the Hang Seng Index fell back again, down 0.6% to close at 21859 points. The daily chart was showing an attempt to breakout above the previous highs at the 22000 point level but as I warned previously, those overhead tails on the previous daily candles that matched the previous false breakout top were indicating a lot of intrasession resistance. Momentum continues to rollover here, so be cautious of low volatility that could beget higher downside volatility soon:
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