Market Commentary – September 15, 2022

Kevin Jock

15th September 2022

U.S. stocks stabilized on Wednesday after a dramatic sell-off from Tuesday, as both the S&P 500 and Nasdaq Indices advanced 0.34% and 0.74% respectively. The newly released PPI data offered some relief in the aftermath of Tuesday’s hotter than expected CPI print.

Across the Atlantic, European shares continue to fall on Wednesday as it has failed to benefit from an overnight recovery on Wall Street, with market participants continue to digest the outlook of inflation and rate hikes. London’s FTSE 100 declined 1.47% on the day, while Germany’s DAX slid 1.22%. Meanwhile, Ukraine’s president Zelenskyy encountered car accident upon returning to Kyiv, fortunately, he did not suffer serious injuries after being examined by doctors.

In Asia Pacific, regional equities opened slightly higher on Thursday morning as both the ASX 200 and Nikkei 225 indices went up by 0.63% and 0.17% respectively. HK’s Hang Seng Index is also up by 0.74%, approaching the 19,000 points level. On the other hand, as the Japanese Yen continue to plunge, the Japanese officials have stepped up by phoning currency traders to inquire about market conditions. A potential direct market intervention could occur should such depreciation continue to last.

Price of oil have edged up in the past few days as a looming railway disruption in the U.S. supported the markets, with Brent crude currently trading at $94.39 per barrel. Bitcoin price looks to be stabilized after two days of sell-off, narrowly holding off the key level of $20K. The dollar index stood near recent peaks today, with markets believing the Fed will continue to implement monetary tightening next week.

XAUUSD Daily (2022.9.15)

Figure 1 (Source: IS Prime) XAUUSD daily: Price of bullion falls extensively as it is currently trading below the key support level of $1,700 today, on concerns over more hawkish measures by the Fed which has in turn, undermines the metal markets.

Headliner to Review

  • UK CPI rose 9.9% in August, year-to-year. It is below the consensus forecast of 10% as fuel prices have fallen, though food prices increased further as the country’s cost of living crisis persists.
  • U.S. PPI in August dropped 0.1% from the month before, match with economists’ expectations. The annual increase was 8.7%, down from July’s increase of 9.8%.

Headliner to Watch

  • The Chinese retail sales figure is expected to release on Friday, looking to hike further by 3.2%.
  • The U.S. preliminary UoM consumer sentiment index is looking to tick up slightly to 60, from 58.2 in the previous month.

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Kerry Man