20.07.22 Macro Morning
Chris Becker | Jul 20, 2022 09:42
Risk sentiment is riding the rollercoaster once more this time for an upleg despite any catalysts or fresh news. Wall Street soared overnight, lifting nearly 3% across the board, as European stocks continued to bounceback. The recent weakness in USD continued with Euro lifting above the 1.02 level while the Australian dollar pushed through the 69 handle as markets reacted to a very hawkish set of minutes from the RBA yesterday. Bond markets were largely contained with a bit more loosening of yields with 10 Year Treasuries staying above the 3% level as US interest rate futures still imply a 80bps rate rise at the next Fed meeting. Commodity prices were still volatile with Brent up more than 2% above the $107USD per barrel level while copper had a big 3% lift off its recent lows, while gold struggled again, remaining steady above the $1700USD per ounce level.
Looking at share markets in Asia from yesterday’s session, where mainland Chinese share markets started lower but recovered post the lunch break with the Shanghai Composite posting a scratch session as a result, closing at 3279 points while the Hang Seng Index retraced more sharply, down nearly 1% to close at 20660 points. Sentiment was really waning on the daily chart with considerable overhead resistance creating a series of lower daily lows as price retraced below the early June lows around the 20600 point area before yesterday’s move. Daily momentum readings that were oversold have now reverted but this remains a swing play only until we see a substantial close above the high moving average proper:
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