Market Commentary – June 24, 2022

Kevin Jock

24th June 2022

U.S. equities continue to advance on Thursday, even after the Fed chair Powell delivered an even more hawkish message about central bank’s efforts to deter inflation during his testimony yesterday, as both the S&P 500 and Nasdaq indices closed up by 0.95% and 1.62% respectively.

Across the Atlantic, European shares dropped yesterday to more than one-year low, dragged by the worse than expected PMI figures, as well as a looming energy conflicts with Russia, in which it has entered an alarming stage in Germany caused by the shortage of gas, which subsequently made the DAX indices descended by 1.8%. Meanwhile, EU leaders decided to make Ukraine and Moldova official candidates for membership of the bloc.

In Asia Pacific, all the major local stock indices are up today. Both the ASX 200 and Nikkei 225 indices advanced 0.22% and 0.73% respectively, while HK’s Hang Seng index rose higher by 1.23%, supported by its tech giants as Beijing is easing its regulatory crackdown on the sector.

Oil prices traded sideways today, though it slipped back into sell mode on worse than expected business activity data across both Europe and the U.S., with WTI crude currently at $105.93. Gold prices are also pummeled down as investors expect aggressive interest rate hikes from the Fed. On the other hand, bitcoin managed to claw back some of its recent losses to trade above $21K.

EURUSD (2022.6.24)

Figure 1 (Source: IS Prime) EURUSD daily: The Euro is under pressure after the weak PMI data, testing the 1.05 handle on the downside.

Headliner to Review

  • The flash manufacturing PMI figures are released across multiple nations, including France, Germany, Euro zone and the U.S, with the indices came out to be 51, 52, 52 and 52.4 respectively, all lower than the forecasted figures.

Headliner to Watch

  • The U.S. core durable goods order is due to release on Monday, previously it rose marginally by 0.4%.
  • U.S. pending home sales statistics is also looking to be printed next week, it declined by 3.9% in the previous month.

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Antony Tan
Kerry Man