Market Commentary – September 06, 2022

Kevin Jock

6th September 2022

The U.S. market is closed on Monday due to the Labor Day holiday; it is looking to resume by this evening. Meanwhile, U.S. has also unveiled its plan to sell weapons to Taiwan, worth up to $1.1bn as China increased military pressure to the island.

Across the Atlantic, European shares tumbled on Monday after Russia decided to switch off their main gas pipeline till economic sanctions are lifted. Both the CAC 40 and Germany’s DAX declined 1.2% and 2.22% respectively. On the other hand, Liz Truss has won the race to become the leader of the Conservative Party, as well as be the UK’s prime minister.

In Asia, regional stocks are pretty much flat on Tuesday, as both the ASX 200 and Nikkei 225 indices remain almost unchanged during the morning trading sessions, while HK’s Hang Seng Index dipped slightly by 0.15%. Covid cases has rose above 10K daily for the past three consecutive days in Hong Kong.

U.S. WTI crude price advanced to $90.51 per barrel on Monday after the announcement made by OPEC+, as they’ve hinted to cut oil supply to offset weakness in prices. Gold price recovered substantially from a six-week low as the EU energy crisis boosted the demand of such safe haven asset, currently trading at around $1,719.51 per ounce. The euro has fell to as low as $0.9888 yesterday, a 20-year lows after Russia suspended gas flows to the continent.

GBPUSD Daily (2022.9.6)

Figure 1 (Source: IS Prime) GBP/USD daily: Sterling dropped as low as $1.14433 on Monday as it has fallen 8% over the past three months, due to the darkening outlook of the UK economy.

Headliner to Review

  • OPEC+ has agreed to cut oil output by 100K barrels per day in October, during their meetings on Monday.
  • Eurozone retail sales increased by 0.3% in July, in line with expectations, with both the increase of food and fuel spending driving up the overall figures.

Headliner to Watch

  • The second quarter GDP figure is due to release in Australia on Wednesday, forecasted to increase by 1%.
  • Bank of Canada (BOC) is looking to hike its overnight rate further from 2.5% to 3.25% during their meeting on tomorrow.

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Kerry Man