Market Commentary – September 23, 2022

Kevin Jock

23rd September 2022

Wall Street stocks extended Wednesday’s losses as more central banks joined the Fed’s race of hiking interest rates. The blue-chip S&P 500 index dipped 0.84%, while the tech-heavy Nasdaq indices dropped 1.37%. Notably, treasury yield surged again with the 10-year note crossed the 3.7% level for the first time since 2011.

Across the Atlantic, European shares also declined on Thursday, affected by the rate decisions of various central banks around the globe, with both the CAC 40 and DAX fell 1.87% and 1.84% respectively. The board member of the ECB also mentioned that the interest rate will continue to go up despite the fact that the euro zone may face an economic downturn.

In Asia, regional equities continue to tumble this morning, unsettled by the high interest rate environment with all the major stock indices down on the day. HK’s Hang Seng index is barely above the key level of 18,000 points and we shall see if this support level can be hold off or not.

Price of oil is looking to head for fourth straight weekly losses as concerns of monetary tightening outweighed less crude supply due to the Russia-Ukraine conflicts. U.S. WTI crude is slightly down on Friday, currently trading at $83.535 per barrel. The Japanese Yen encountered a huge volatile session yesterday as the BoJ intervened the market to strengthen the currency for the first time since 1990s.

AUDUSD Daily (2022.9.23)

Figure 1 (Source: IS Prime) AUD/USD daily: The Australian dollar drifted to its lowest value against the greenback since May 2020, amid worries about geopolitical concerns and global growth, as it plunges to $0.6622.

Headliner to Review

  • We had a series of central bank rate announcements, whereby the Bank of England rose rates by 0.5%, the Swiss National Bank increased interest rates by 0.75% and which is unexpected, while Bank of Japan maintain the policy rate unchanged.

Headliner to Watch

  • We will see the release of manufacturing PMI in Japan by next Monday, previously the figure reached 51.5.
  • The German ifo business climate index is due to print next week, reaching 88.5 in the month before.

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Kerry Man