USD/CHF has slipped strongly as investors have shrugged-off uncertainty associated with the Fed interest rate outlook.
Investors have shrugged-off uncertainty associated with the hawkish interest rate outlook from Fed policymakers.
SNB Maechler commented that further hikes in interest rates cannot be ruled out.
The USD/CHF pair has witnessed an intense sell-off, following the footprints of the declining US Dollar Index (DXY) in the European session. The Swiss Franc asset has slipped sharply to near 0.8950 as investors have shrugged-off uncertainty associated with the hawkish interest rate outlook from Federal Reserve (Fed) policymakers and upcoming Employment data.
S&P500 futures have recovered nominal losses posted in London, however, the overall market sentiment is bearish. The US Dollar Index (DXY) has slipped vertically to near 103.00 despite more interest rate hikes from the Fed being highly likely.
Turkish lira fell to new marginally lower record low in early Wednesday, as Turkish June inflation data sparked fresh weakness of the currency.
Monthly inflation rose by 3.9% in June, below 4.8% consensus and annualized figure was also below expectations (38.2% in June vs 39.4% f/c), while consumer prices were slightly below previous month’s figure (June PPI 40.4% vs May 40.7%).
Inflation remains elevated, though significantly below last October’s 85.5%, the highest in over two decades.
Turkish lira fell sharply in June (down over 20% vs US dollar, the biggest monthly fall on a record), following re-election of President Erdogan and despite CBRT’s new leadership and turn towards more orthodox approach to monetary policy, as the central bank already raised interest rates after a cycle of cutting rates last year.
Trend Bullish
Investors have shrugged-off uncertainty associated with the hawkish interest rate outlook from Fed policymakers.
SNB Maechler commented that further hikes in interest rates cannot be ruled out.
The USD/CHF pair has witnessed an intense sell-off, following the footprints of the declining US Dollar Index (DXY) in the European session. The Swiss Franc asset has slipped sharply to near 0.8950 as investors have shrugged-off uncertainty associated with the hawkish interest rate outlook from Federal Reserve (Fed) policymakers and upcoming Employment data.
S&P500 futures have recovered nominal losses posted in London, however, the overall market sentiment is bearish. The US Dollar Index (DXY) has slipped vertically to near 103.00 despite more interest rate hikes from the Fed being highly likely.
Turkish lira fell to new marginally lower record low in early Wednesday, as Turkish June inflation data sparked fresh weakness of the currency.
Monthly inflation rose by 3.9% in June, below 4.8% consensus and annualized figure was also below expectations (38.2% in June vs 39.4% f/c), while consumer prices were slightly below previous month’s figure (June PPI 40.4% vs May 40.7%).
Inflation remains elevated, though significantly below last October’s 85.5%, the highest in over two decades.
Turkish lira fell sharply in June (down over 20% vs US dollar, the biggest monthly fall on a record), following re-election of President Erdogan and despite CBRT’s new leadership and turn towards more orthodox approach to monetary policy, as the central bank already raised interest rates after a cycle of cutting rates last year.
Trend Bullish
Comment:
Wall Street Ends Higher after CPI
The RICS UK Residential Market Survey house price balance, which measures the gap between the percentage of respondents seeing rises and falls in house prices, fell to -46 in June 2023 from -30 in May, posting the weakest reading in four months and coming in below forecasts of -34. This points to a slowdown in the British housing market as higher borrowing costs weighed on demand, with average two-year fixed mortgage rates in the country recently hitting a 15-year high. Expectations that the Bank of England will raise interest rates further this year to bring down inflation also dampened sentiment. Simon Rubinsohn, chief economics at RICS, said: “The latest increase in interest rates and the impact this has already had on mortgage rates is clearly visible in buyer enquiries, sales and prices which have all retreated over the past month.”
The BusinessNZ Performance of Manufacturing Index in New Zealand fell to 47.5 in June 2023 from 48.9 in the previous month. It marked the fourth straight month of contraction in the manufacturing sector and the steepest since last November as activities negatively influenced by declining demand, cost increases and production/staffing issues as the key negative influences on activity for the current month. Production (47.5 vs 45.7 in May) remained subdued and new orders (43.8 vs 50.8) fell back to contraction zone. Meanwhile, employment (47 vs 49.5) contracted further while deliveries (50.5 vs 46) rebounded.
Brazil’s Ibovespa stock index gave up on earlier gains to close 0.1% higher to finish around 117,700 on Wednesday, inline with global positive mood, after the US inflation data came in below expectations in June, even the core measures, suggesting a possible turning point for Federal Reserve policymakers in the coming months. On the domestic data front, services activity in Brazil grew by a more-than-expected 0.9% in May, following a decline of 1.5% in the previous month, placing the sector 11.5% above the pre-pandemic level of February 2020. On the corporate front, shares in the world's largest meatpacker JBS surged 9%, the most in the index, after proposing a dual listing of shares in Sao Paulo and New York in a securities filing today. It was followed by B3 (+2.4%), Gerdau (+2.1%) and PetroRio (+2%).
The RICS UK Residential Market Survey house price balance, which measures the gap between the percentage of respondents seeing rises and falls in house prices, fell to -46 in June 2023 from -30 in May, posting the weakest reading in four months and coming in below forecasts of -34. This points to a slowdown in the British housing market as higher borrowing costs weighed on demand, with average two-year fixed mortgage rates in the country recently hitting a 15-year high. Expectations that the Bank of England will raise interest rates further this year to bring down inflation also dampened sentiment. Simon Rubinsohn, chief economics at RICS, said: “The latest increase in interest rates and the impact this has already had on mortgage rates is clearly visible in buyer enquiries, sales and prices which have all retreated over the past month.”
The BusinessNZ Performance of Manufacturing Index in New Zealand fell to 47.5 in June 2023 from 48.9 in the previous month. It marked the fourth straight month of contraction in the manufacturing sector and the steepest since last November as activities negatively influenced by declining demand, cost increases and production/staffing issues as the key negative influences on activity for the current month. Production (47.5 vs 45.7 in May) remained subdued and new orders (43.8 vs 50.8) fell back to contraction zone. Meanwhile, employment (47 vs 49.5) contracted further while deliveries (50.5 vs 46) rebounded.
Brazil’s Ibovespa stock index gave up on earlier gains to close 0.1% higher to finish around 117,700 on Wednesday, inline with global positive mood, after the US inflation data came in below expectations in June, even the core measures, suggesting a possible turning point for Federal Reserve policymakers in the coming months. On the domestic data front, services activity in Brazil grew by a more-than-expected 0.9% in May, following a decline of 1.5% in the previous month, placing the sector 11.5% above the pre-pandemic level of February 2020. On the corporate front, shares in the world's largest meatpacker JBS surged 9%, the most in the index, after proposing a dual listing of shares in Sao Paulo and New York in a securities filing today. It was followed by B3 (+2.4%), Gerdau (+2.1%) and PetroRio (+2%).
Comment:
Japanese Shares Rise as US Inflation Eases
The Nikkei 225 Index jumped 0.8% to above 32,200 while the broader Topix Index gained 0.3% to 2,228 on Thursday, rising from one-month lows and tracking a rally on Wall Street overnight as cooler-than-expected US inflation data raised hopes that the Federal Reserve is closer to the end of its tightening cycle. Investors also bought back technology stocks following days of consolidation, with notable gains from SoftBank Group (1.9%), Advantest (1.4%), Socionext (2.8%), Tokyo Electron (0.6%), Z Holdings (2.8%) and Renesas Electronics (2.5%). Other index heavyweights also advanced, including Sony Group (4.5%), Fast Retailing (1%), Daiichi Sankyo (4.5%), Mitsui & Co (1%) and Eisai Co (1.6%).
Australia Inflation Expectations Stable inJuly
NZX Trades Slightly Higher
New Zealand Factory Activity Shrinks to 7-Month Low
Argentina Indicators
Industrial Production 1.1 1.8 percent May/23
Industrial Production Mom 1.2 3.2 percent Apr/23
Capacity Utilization 68.9 67.3 percent Apr/23
Changes in Inventories -20633 20148 ARS Million Mar/23
Car Production 53282 54399 Units May/23
Car Registrations 38.6 33.8 Thousand May/23
Leading Economic Index -0.48 -0.28 percent May/23
Corruption Index 38 38 Points Dec/22
Corruption Rank 94 96 Dec/22
The Turkish lira extended losses to new all-time lows of 26.2 per USD, amid increasing signs of a shift to a more orthodox approach and as the central bank reportedly stopped using its reserves to support the currency. On June 22nd, the central bank of Turkey raised interest rates by 650 bps to 15%, marking a reversal from its previous ultra-loose and unorthodox monetary policy although the move fell short of meeting market expectations for a higher rate of 21%. Few days later, policymakers loosened measures designed to boost the lira, including lowering the securities maintenance ratio to 5% from 10% and the threshold for the share of lira deposits to 57% from 60%.
The Nikkei 225 Index jumped 0.8% to above 32,200 while the broader Topix Index gained 0.3% to 2,228 on Thursday, rising from one-month lows and tracking a rally on Wall Street overnight as cooler-than-expected US inflation data raised hopes that the Federal Reserve is closer to the end of its tightening cycle. Investors also bought back technology stocks following days of consolidation, with notable gains from SoftBank Group (1.9%), Advantest (1.4%), Socionext (2.8%), Tokyo Electron (0.6%), Z Holdings (2.8%) and Renesas Electronics (2.5%). Other index heavyweights also advanced, including Sony Group (4.5%), Fast Retailing (1%), Daiichi Sankyo (4.5%), Mitsui & Co (1%) and Eisai Co (1.6%).
Australia Inflation Expectations Stable inJuly
NZX Trades Slightly Higher
New Zealand Factory Activity Shrinks to 7-Month Low
Argentina Indicators
Industrial Production 1.1 1.8 percent May/23
Industrial Production Mom 1.2 3.2 percent Apr/23
Capacity Utilization 68.9 67.3 percent Apr/23
Changes in Inventories -20633 20148 ARS Million Mar/23
Car Production 53282 54399 Units May/23
Car Registrations 38.6 33.8 Thousand May/23
Leading Economic Index -0.48 -0.28 percent May/23
Corruption Index 38 38 Points Dec/22
Corruption Rank 94 96 Dec/22
The Turkish lira extended losses to new all-time lows of 26.2 per USD, amid increasing signs of a shift to a more orthodox approach and as the central bank reportedly stopped using its reserves to support the currency. On June 22nd, the central bank of Turkey raised interest rates by 650 bps to 15%, marking a reversal from its previous ultra-loose and unorthodox monetary policy although the move fell short of meeting market expectations for a higher rate of 21%. Few days later, policymakers loosened measures designed to boost the lira, including lowering the securities maintenance ratio to 5% from 10% and the threshold for the share of lira deposits to 57% from 60%.
Comment:
China New Home Prices Flatten in June
Average new home prices in China's 70 major cities were flat year-on-year in June 2023 after edging up 0.1 percent in the previous month. Among the biggest Chinese cities, prices increased in Beijing (3.5% vs 4.3% in May), Chongqing (0.6% vs 1.3%), Shanghai (4.8% vs 4.9%), and Tianjin (0.2% vs -0.3%). By contrast, cost fell in both Shenzhen (-2.4% vs -0.2%) and Guangzhou (-0.8% vs -0.4%). On a monthly basis, new home prices were unchanged, the weakest result so far this year, as as broad efforts from Beijing have not revived the ailing prope
Average new home prices in China's 70 major cities were flat year-on-year in June 2023 after edging up 0.1 percent in the previous month. Among the biggest Chinese cities, prices increased in Beijing (3.5% vs 4.3% in May), Chongqing (0.6% vs 1.3%), Shanghai (4.8% vs 4.9%), and Tianjin (0.2% vs -0.3%). By contrast, cost fell in both Shenzhen (-2.4% vs -0.2%) and Guangzhou (-0.8% vs -0.4%). On a monthly basis, new home prices were unchanged, the weakest result so far this year, as as broad efforts from Beijing have not revived the ailing prope
Comment:
Brazilian Stocks Fall to Finish Week on Sour Note
Brazil’s Ibovespa stock index fell 1.3% to close at 117,698 marks on Friday, after a report that showed retail sales in Brazil unexpectedly decreased in May. Brazil's retail sales fell 1% in May from a month earlier, the first decrease since December. Among single stocks, BRF tumbled 7.4% after pricing its stock offering at 9 reais per share, raising 5.4 billion reais. Also, GOL declined 6% due to forecasts indicating a loss in the second quarter and Azul slipped by 6.5%. Meanwhile, the heavyweight Petrobras lost 2.3% in line with the downward movement of oil prices. On the other hand, Méliuz surged 14.1% after closing at a record low the day before. For the week, the Ibovespa went down by 1%.
China New Home Prices Flatten in June
Average new home prices in China's 70 major cities were flat year-on-year in June 2023 after edging up 0.1 percent in the previous month. Among the biggest Chinese cities, prices increased in Beijing (3.5% vs 4.3% in May), Chongqing (0.6% vs 1.3%), Shanghai (4.8% vs 4.9%), and Tianjin (0.2% vs -0.3%). By contrast, cost fell in both Shenzhen (-2.4% vs -0.2%) and Guangzhou (-0.8% vs -0.4%). On a monthly basis, new home prices were unchanged, the weakest result so far this year, as as broad efforts from Beijing have not revived the ailing property sector with recovery weakening in the world's second-largest economy.
Shares in New Zealand fell 15 points or 0.13% to 11,998 in early trading at the start of the week, slightly retreating from a nearly 2-month peak hit in the prior session, amid losses from non-energy minerals, industrial services, and transport. A decline in US stock futures rattled sentiment after Wall Street closed mostly lower Friday, with the S&P 500 snapping a 4-day win streak, as investors digested bank earnings. Traders also took a cautious stance ahead of a flurry of economic data from China later in the day, including Q2 GDP readings, with concerns growing that the post-pandemic bounce is rapidly losing momentum.
US Natgas Prices Fall to 1-Month Low
Colombia Industrial Output Falls Less than Expected
Manufacturing production in Columbia sank by 3.4% year-on-year in May 2023, following a 6.4% decline in the previous month and compared with market estimates of a 4.9% contraction. The downturn added to recent evidence that the Colombian economy is succumbing to the aggressive interest rate hikes from its central bank. Output fell primarily for paper products (-15.1%), beverages (-11.2%), chemical products (-14.7%), and textiles (-22.1%).
Brazil’s Ibovespa stock index fell 1.3% to close at 117,698 marks on Friday, after a report that showed retail sales in Brazil unexpectedly decreased in May. Brazil's retail sales fell 1% in May from a month earlier, the first decrease since December. Among single stocks, BRF tumbled 7.4% after pricing its stock offering at 9 reais per share, raising 5.4 billion reais. Also, GOL declined 6% due to forecasts indicating a loss in the second quarter and Azul slipped by 6.5%. Meanwhile, the heavyweight Petrobras lost 2.3% in line with the downward movement of oil prices. On the other hand, Méliuz surged 14.1% after closing at a record low the day before. For the week, the Ibovespa went down by 1%.
China New Home Prices Flatten in June
Average new home prices in China's 70 major cities were flat year-on-year in June 2023 after edging up 0.1 percent in the previous month. Among the biggest Chinese cities, prices increased in Beijing (3.5% vs 4.3% in May), Chongqing (0.6% vs 1.3%), Shanghai (4.8% vs 4.9%), and Tianjin (0.2% vs -0.3%). By contrast, cost fell in both Shenzhen (-2.4% vs -0.2%) and Guangzhou (-0.8% vs -0.4%). On a monthly basis, new home prices were unchanged, the weakest result so far this year, as as broad efforts from Beijing have not revived the ailing property sector with recovery weakening in the world's second-largest economy.
Shares in New Zealand fell 15 points or 0.13% to 11,998 in early trading at the start of the week, slightly retreating from a nearly 2-month peak hit in the prior session, amid losses from non-energy minerals, industrial services, and transport. A decline in US stock futures rattled sentiment after Wall Street closed mostly lower Friday, with the S&P 500 snapping a 4-day win streak, as investors digested bank earnings. Traders also took a cautious stance ahead of a flurry of economic data from China later in the day, including Q2 GDP readings, with concerns growing that the post-pandemic bounce is rapidly losing momentum.
US Natgas Prices Fall to 1-Month Low
Colombia Industrial Output Falls Less than Expected
Manufacturing production in Columbia sank by 3.4% year-on-year in May 2023, following a 6.4% decline in the previous month and compared with market estimates of a 4.9% contraction. The downturn added to recent evidence that the Colombian economy is succumbing to the aggressive interest rate hikes from its central bank. Output fell primarily for paper products (-15.1%), beverages (-11.2%), chemical products (-14.7%), and textiles (-22.1%).
Comment:
YEN Oil AUD NZD Asian stocks fall on bad chinese data
China Industrial Output Growth Beats Estimates
The Chinese economy advanced 6.3% yoy in Q2 of 2023, faster than a 4.5% growth in Q1 but missing market estimates of 7.3%. The latest figures were distorted by a low base of comparison last year when Shanghai and other big cities were in strict lockdown. During H1, the economy grew by 5.5%. China has set a GDP growth target of around 5% for this year after the economy expanded by 3% in 2022 and missed the government's target of about 5.5%. Beijing has shown reluctance to launch greater stimulus, especially as local government debt has soared. In June alone, indicators showed a mixed picture: retail sales rose the least in 5 months, industrial output growth grew for the 14th month, and the urban jobless rate was unchanged at 5.2% but youth unemployment hit a new high of 21.3%. Data released earlier showed shipments from China fell the most in three years, as high inflation in key markets and geopolitics hit foreign demand. A Politburo meeting is expected later this month.
Asian Stocks Fall on Weak Chinese Data
Asian equity markets fell on Monday as investors reacted to key data showing China’s economy grew 6.3% in the second quarter, lower than the 7.3% expansion expected by analysts. The Shanghai Composite led the decline, losing more than 1%. The Shenzhen Component, S&P/ASX 200 and Kospi indexes also tumbled. Meanwhile, Japanese markets are closed for a holiday, while Hong Kong markets will likely be closed for the day due to a typhoon.
China Stocks Drop on Weak GDP Data
The Shanghai Composite dropped 1.1% to around 3,200 while the Shenzhen Component lost 0.8% to 10,990 on Monday, giving back gains from last week as investors reacted to key data showing China’s economy grew 6.3% in the second quarter, lower than the 7.3% expansion expected by analysts. Meanwhile, China’s industrial production and fixed asset investments increased more than anticipated, while retail sales missed forecasts. Mainland stocks gained last week amid hopes that a faltering post-pandemic recovery would prompt Beijing to offer more pro-growth policy measures. Commodity-linked and financial stocks led the decline, with notable losses from Yunnan Lincang (-3.5%), Zijin Mining (-1.5%), China Shenhua Energy (-4.5%), ICBC (-6%), Ping An Insurance (-1%) and China Merchants Bank (-1.1%).
China Industrial Output Growth Beats Estimates
The Chinese economy advanced 6.3% yoy in Q2 of 2023, faster than a 4.5% growth in Q1 but missing market estimates of 7.3%. The latest figures were distorted by a low base of comparison last year when Shanghai and other big cities were in strict lockdown. During H1, the economy grew by 5.5%. China has set a GDP growth target of around 5% for this year after the economy expanded by 3% in 2022 and missed the government's target of about 5.5%. Beijing has shown reluctance to launch greater stimulus, especially as local government debt has soared. In June alone, indicators showed a mixed picture: retail sales rose the least in 5 months, industrial output growth grew for the 14th month, and the urban jobless rate was unchanged at 5.2% but youth unemployment hit a new high of 21.3%. Data released earlier showed shipments from China fell the most in three years, as high inflation in key markets and geopolitics hit foreign demand. A Politburo meeting is expected later this month.
Asian Stocks Fall on Weak Chinese Data
Asian equity markets fell on Monday as investors reacted to key data showing China’s economy grew 6.3% in the second quarter, lower than the 7.3% expansion expected by analysts. The Shanghai Composite led the decline, losing more than 1%. The Shenzhen Component, S&P/ASX 200 and Kospi indexes also tumbled. Meanwhile, Japanese markets are closed for a holiday, while Hong Kong markets will likely be closed for the day due to a typhoon.
China Stocks Drop on Weak GDP Data
The Shanghai Composite dropped 1.1% to around 3,200 while the Shenzhen Component lost 0.8% to 10,990 on Monday, giving back gains from last week as investors reacted to key data showing China’s economy grew 6.3% in the second quarter, lower than the 7.3% expansion expected by analysts. Meanwhile, China’s industrial production and fixed asset investments increased more than anticipated, while retail sales missed forecasts. Mainland stocks gained last week amid hopes that a faltering post-pandemic recovery would prompt Beijing to offer more pro-growth policy measures. Commodity-linked and financial stocks led the decline, with notable losses from Yunnan Lincang (-3.5%), Zijin Mining (-1.5%), China Shenhua Energy (-4.5%), ICBC (-6%), Ping An Insurance (-1%) and China Merchants Bank (-1.1%).
Comment:
Trade is open
Comment:
Trend!
DXY decreased to a 14-month low of 100.61
Wall Street Rallies after Softer Inflation
US stocks surged on Wednesday after both headline and core inflation fell more than expected in June, reinforcing the view the Federal Reserve may stop the tightening campaign sooner than expected. The Dow Jones gained around 250 points to 34548, the highest level since November last year, with 3M and Goldman Sachs up nearly 2% and among the top performers. The S&P 500 added 0.9% 4477, a level not seen since April of 2022, led by shares in the consumer discretionary, tech and real estate sectors. The Nasdaq was up about 1.2% to 13906, also the highest since April last year. Traders are currently pricing in a 92% chance for a 25bps increase in the fed funds rate this month, while the odds for another quarter-point hike in September fell to 13% from 20% before the CPI release and in November eased to 26% from 34%.
Brazil Business Morale Rises to 8-Month High
The Industrial Entrepreneur Confidence Index (ICEI) in Brazil rose by 0.7 points from the previous month to an eight-month high of 51.1 in July of 2023. This marks the second consecutive month in which the industry has shown confidence, attributed primarily to a more positive evaluation of the current economic conditions (+1.3 points to 45.5). Also, the indicator of future expectations increased (+0.4 points to 53.9), indicating optimism for the next six months.
FTSE MIB Close Rise to 15-Year High
The FTSE MIB index closed 1.8% higher at 28,573 on Wednesday, outperforming other benchmark European indices amid sharp gains for its heavyweight financial sector as markets digested the soft US inflation print. American consumer prices rose by 3% annually in June, below estimates of 3.1%, benefitting from a slowdown in core consumer prices. The development lifted equities amid hopes that the Fed will be able to ease its hawkish pressure. Banks were among the sharpest gainers as BTP yields fell by 15bps, aiding their balance sheet with Banca MPS and Banco BPM both adding more than 2%. In the meantime, STMicroelectronics shares surged 4.8% amid recommendation updates from Jeffries and Citigroup.