Market Commentary – September 09, 2022

Kevin Jock

9th September 2022

Wall Street equities continue to rebound on Thursday, led by healthcare and financial companies as investors digested hawkish comments from the central bankers, with traders now anticipate 87% chances of a 0.75% rate hike at this month’s meeting. All the U.S. major stock indices advanced around 0.6% on the day.

European stocks also rose slightly yesterday, led by gains in bank stocks after the ECB announced its biggest-ever interest rate hike, which is widely expected, and they’ve promised further actions in an effort to bring down inflation to the target level of 2%. Meanwhile, Queen Elizabeth II, passed away peacefully at the age of 96, being the longest-serving monarch in the UK.

In Asia, regional shares crept higher on Friday as a result of the ease of dollar, with markets now becoming calmer after a record rate hike from the ECB. Japan’s Nikkei 225 rose 0.55% at the mid-day break, while HK’s Hang Seng Index advanced over 2% on the day, above the 19,000 points level.

In terms of U.S. WTI crude, it is heading for second week of losses on concerns that slowing global economic growth will weigh on demand. Bitcoin price climbed higher slightly today to $19.7K, while the price of yellow metal is performing in a rangebound mode throughout this week, currently trading at $1,720.83 per ounce.

NZDUSD Daily (2022.9.9)

Figure 1 (Source: IS Prime) NZD/USD daily: Kiwi dollar fell to the recent low of $0.6 as traders are growing bearish on APAC currencies, as slowing growth in China is too much of a risk to the region.

Headliner to Review

  • The ECB raised interest rates by 0.75%, to the current level of 1.25% in order to tackle record inflation, even though the eurozone is already heading into recession due to high energy prices.
  • The U.S. crude oil inventories showed a surprise build of 8.8M barrels last week, compared to the forecasted figure of a decrease of 2M barrels.

Headliner to Watch

  • We will see the release of UK monthly GDP figures by next Monday, previously its economy contracted by 0.6%.

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Kerry Man