Market Commentary – June 03, 2022

Kevin Jock

3rd June 2022

The U.S. equity markets advanced broadly on Thursday, even after the Fed’s vice-chair said a pause of rate raise in September was very hard, which is a negative comment from the market’s perspective but however, seems did not dim U.S. stocks. All three major stock indices rose on the day, with the Nasdaq index closed up 2.69%. U.S. NFP jobs data will release tonight, which would offer further clue about how far the central bank may tighten policy to rein inflation.

European shares bounced back on Thursday after two days of consecutive declines, led by luxury stocks which provides the biggest boosts to the index. However, the overall trading volume are expected to be subdued as the UK markets are closed for the public holiday. Both the CAC 40 and DAX indices hiked 1.27% and 1.01% respectively. Ukraine’s central bank has increased its benchmark rate by 1,500bps, a drastic change from 10% to 25% which is the first increase since the Russian invasion.

In Asia Pacific, both the ASX 200 and Nikkei 225 indices followed the rallies from Wall Street overnight, with both stock indices hiked 0.76% and 1.08% respectively on Friday morning. The Chinese and HK stock markets are closed due to the local Dragon Boat Festival holiday. Meanwhile, Amazon will close the China Kindle Store next year, after losing out to domestic rivals.

Oil price shot higher yesterday as U.S. crude inventories dropped more than expected last week, with WTI crude settling at $118.605 per barrel last night. Opec has agreed to increase oil production following pressures from the U.S. Price of gold also shot up significantly last night, to $1,868.53 per ounce, while bitcoin rose marginally to trade slightly above $30K.


Figure 1 (Source: IS Prime) GBP/USD daily : Back above the 1.25 handle as demand for the American greenback weakens alongside poor leading economic figures.

Headliner to Review

  • The release of the U.S. ADP employment report printed 128K jobs being created in May, much less than the forecasted figure of 295K and down from 202K in April. Such dramatic decrease is caused by hiring decline at U.S. small businesses.
  • The Swiss CPI rose faster than expected at a rate of 0.7% in May 2022, driven by higher housing rentals, as well as price increase among food products.

Headliner to Watch

  • The Chinese Caixin services PMI index is due to release on next Monday, previously it recorded at 36.2 which is much lower than the benchmark level of 50.

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Antony Tan
Kerry Man