Market Commentary – August 30, 2022

Kevin Jock

30th August 2022

U.S. equities continue to lose ground following last Friday’s dramatic declines as the impact of Fed chair Powell’s speech continue to reverberate through global markets yesterday. The Dow, S&P 500 and the Nasdaq indices dipped 0.57%, 1.02% and 0.67% respectively. Meanwhile, the two-year U.S. Treasury note rose to 3.466%, the highest level since 2007.

Across the Atlantic, European stocks fell on Monday as well as the ECB board members signaled another big rate hike in September. The broad benchmark indices STOXX 50 declined 0.92% on the day. On the other hand, Ukraine said they had launched a counter-offensive against Russia forces in an attempt to regain part of the regions occupied by Russia near the southern city of Kherson.

In Asia, performance of regional shares is mixed today, with both the ASX 200 and Nikkei 225 indices advanced 0.52% and 0.81% respectively, while Chinese stocks and HK shares fell, especially HK tech stocks as the sector dropped over 2.4%.

In terms of commodities, Brent crude rose significantly yesterday as it settled at $103.825 per barrel, while gold saw some relief as the dollar retreated from a 20-year peak, currently trading at $1,734.49 per ounce. The Chinese Yuan continue depreciate against the greenback as it broke through the 6.9 level since yesterday.

USDJPY chart (2022.8.30)

Figure 1 (Source: IS Prime) USD/JPY daily: The Japanese Yen was the worst performing G10 currency on Monday as it sinks against the dollar, due to the appreciation of greenback after Fed chair’s comments from last week. The Yen briefly touched 139 on yesterday.

Headliner to Review

  • Retail sales in Australia printed +1.3% month-to-month in July, much higher than the forecasted figure of +0.3%.

Headliner to Watch

  • The U.S. ADP Research Institute will release their monthly employment report on Wednesday, expected a gain of 300K jobs in July compared to 128K jobs the month before.
  • We will see the release of CPI figures across the euro-area, with inflation predicted to hit another record as the forecasted data is an increase of 9% compared to 8.9% from the previous month.

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Kerry Man