USD spiked, Oil fell and the Euro inched closer to parity. The strong haven bid rise as the prospect of further tightening by central banks, renewed COVID outbreaks in China and Europe’s energy shortages spooked investors. The Fed’s George, the dissenter in favor of a 50 bp June hike, noted concerns over aggressive policy action & the hawk Bullard still favors a 75 bp move. Recession angst again cropped up and hammered equities with weakness in megacap tech knocking the USA100 down -2.26%. USDIndex above 108.00. Wall Street’s losses have deepened. China imposing strict covid restrictions amid a rise in the subvariant BA.5 Omicron. Earnings season starts on Thursday with JPMorgan kicking it off. It could be a tough season for profits given rising costs. Bloomberg cites IBES data from Refinitive showing Q2 y/y earnings growth of 5.7% which would be the slowest since Q4 2020 and down from 6.8% from April 1.
Twitter Inc TWTR.N sent a letter to Elon Musk saying his effort to abandon his $44 billion takeover is “invalid and wrongful” and that Twitter has not breached any of its obligations, according to a regulatory filing.
- USDIndex broken through the 108.00 level, currently at 108.32 – highest since October 2002.
- Yields: 10-year sector was the outperformer yesterday, back below the 3.00% level again to 2.97%.
- Stocks: USA100 tumbled -2.26%. The USA500 is off -1.15%, and the USA30 has slid -0.52%.
- USOIL down to $102.00 support.
- Gold steady for a 3rd day at $1,730.
- FX Markets: EURUSD dip to within 4 pips of parity at 1.0004, USDJPY spiked to 137.47. The AUDUSD slumped and was one of the worst performers versus the USD amid growing recession angst that has overshadowed the two consecutive 50 bp hikes from the RBA.
- Today – PepsiCo earnings, German ZEW, & BoE’s Governor Bailey speech
Biggest FX Mover @ (06:30 GMT) GBPJPY (-0.25%) Fallen from a test of 164.50 on Monday, to 162.40 now, traded below 162.00 on Thursday. MA’s aligned lower, MACD histogram & signal line lower and below 0 Line, RSI 33.00 and falling. H1 ATR 0.287, Daily ATR 1.895.
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Andria Pichidi
Market Analyst
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