DAILY MARKET ANALYSIS 20-07-2022

European countries are being asked to curb their consumption of natural gas by at least 15% until 

next spring, as part of a wider plan to deal with reduced supplies from Russia.The European Commission, the executive arm of the EU, on Wednesday presented a plan on how countries can prepare for the winter period, when their energy needs are much higher.

Stocks

European stocks retreated on Wednesday, as investors continued to digest corporate earnings, economic data and the potential path of monetary policy. U.S. stocks rallied Tuesday, however, with the market resuming a bounce from last month’s lows, as traders bet on strong corporate earnings reports and wagered that markets have found a bottom.

Currencies

•  The US Dollar’s reversal extended as risk appetite improved on Wall Street with more companies reporting better-than-expected earnings. Which watered down investor worries about a Fed tightening amidst higher inflation. At the close of trade in New York, the Dollar Index (DXY), a popular measure of the Greenback’s value against a basket of 6 major currencies was 0.64% lower at 106.67 against 107.40 yesterday.

• EUR/USD The shared currency extended its corrective pullback against the US Dollar, climbing 0.76% to 1.0227 from 1.0140 yesterday (1.0087 Monday). The Euro traded to an overnight high at 1.0269 before easing toward the close.

•  USD/JPY Against the Japanese Yen, the US Dollar settled at 138.15, modestly lower from yesterday’s 135.25. Overnight, the USD/JPY pair traded to a high at 138.39. Lower US bond yields weighed on the Greenback. Overnight low traded for the USD/JPY pair was at 137.38. The Bank of Japan meets on its interest rate policy tomorrow.

•  AUD/USD builds on its recovery move from the 0.6680 region, or over a two-year low touched last week and gains traction for the fourth successive day on Wednesday. Spot prices have climbed to a fresh monthly high and are holding steady above the 0.6900 mark through the early European session.

Bonds

Treasury yields rose Tuesday as Wall Street assessed better-than-expected corporate earnings reports, and wagered whether stocks have found a bottom.The yield on the benchmark 10-year Treasury note was up at 3.008%, while the yield on the 30-year Treasury bond climbed to 3.166%. Yields move inversely to prices.

Commodities

West Texas Intermediate (WTI), futures on NYMEX, is struggling to overstep the psychological resistance of $100.00 in the Asian session. The black gold has observed mild selling pressure after the American Petroleum Institute (API) reported a build-up of oil inventories for the past week by 1.86 million barrels. Gasoline inventories rose by 1.29 million barrels, however, the distillate stocks fell by 2.1 million barrels.

Up Ahead –Tuesday 19-07-2022

•          JPY       BoJ Interest Rate Decision

•          EUR     ECB Deposit Rate Decision

*The information presented above is intended for informative and educational purposes, should not be considered as investment advice, or an offer or solicitation for a transaction in any financial instrument and thus should not be treated as such. Past performance is not a reliable indicator of future results.