On Monday, the Asian equity markets finished mixed, and European stocks were higher, while the US stock markets closed for a public holiday. Investors may get a reprieve from the sharp recession fear-flared selloff this week as the surge in bond yields is easing, which could boost dip-buys in the risk assets, though the bulls may be short-lived. The broad equity futures all rose in the major indices worldwide, pointing to a higher open in today’s sessions.
Chinese equities continued to outperform the broad Asian markets, with both HSI and CSI 300 up more than 0.4% on Monday. The PBOC has kept the LPR unchanged yesterday, suggesting a gradual approach to the central bank’s stimulus measures, despite economic disruptions due to the covid-lockdowns. Demands are expected to recover in the major cities, with retailer and real estate stock leading gains.
AU and NZ day ahead
The ASX 200 is set to open higher as the SPI futures were up 0.74%. The benchmark index fell for the 7th trading day in a row, taking it to hit a 19-month low. The RBA’s meeting minutes and Governor Philip Lowe’s speech will be in focus today, with an expectation of a 75-bps rate hike to be taken by the central bank in July. The aggressive approach by the RBA may continue pressuring the local stock markets, along with falls in commodity prices due to demand concerns, deepening the sharp selloff in the mining stocks on Monday.
The S&P/NZX 50 was up 0.10% in the first hour of trading. Air NZ’s shares rose 1.8% on CEO Greg Foran’s positive comments about a rapid recovery of traveling demands while saying patience is needed for a full capacity.
The US equity futures were all up, with growth stocks outperforming in the last few sessions. The Dow Jones Industrial Average futures rose 0.94%, while both S&P 500 futures and Nasdaq futures were up 1.10%.
European stocks were all up, led by the financial and energy stocks. The Stoxx 50 (+0.91%), FTSE 100 (+1.50%), DAX (+1.06%), CAC 40 (+0.64%). Read more
Crude oil prices eased losses on Monday after a sharp selloff last week. The recent rebound in the fuel demands in China, as well as increasing consumption in the summer season, may cushion the price drop that was sparked by recession fears. On top of the tight supply of crude, a lack of refineries is another major issue for the oil markets.
WTI: US$110.27 (+0.65%), Brent: US$114. 13 (+0.89%), Natural Gas: US$6
Precious metals had little changes.
COMEX Gold futures: US$1, 840.1 (-0.027%), COMEX Silver futures: US$21. 55 (-0.15%), Copper futures: US$4.008 (-0.14%)
Agricultural products fell on demand concerns last Friday.
Wheat: US$1, 046.75 (-4.01%), Soybean: US$1,537.50 (-0.37%), Corn: US$731.00 (-0.54%).
US dollar was slightly down as risk-off sentiment faded. All the other currencies rose against the greenback.
(See the below FX rates at EAST 8:34 am, Bloomberg)
US dollar index: 104.275 (-0.20%)
The global major bond yields steadied.
US 10-year: 3.226%, US 2-year: 3.21%.
Germany bund 10-year: 1.742%, UK gilt 10-year: 2.60%.
Australia 10-year: 4.06%, NZ 10-year: 4.193%.
The crypto markets rebounded from the weekend sell-off. Bitcoin stayed at above US$20,000, and Ethereum was flat close to US$1,100 The whole market cap has been wiped out about US$1 trillion since the end of March, with bitcoin down 58%, and Ethereum down 68%.
A Solana lending platform, Solend, tried to stop a “whale” account to avoid a major liquidation, which could cause chaos to the blockchain, citing that the account’s position of 5.7 million tokens with a 20% margin will be closed out if Solana’s price goes under US$22.30.
(See below prices at AEST 8:39 am according to Coinmarketcap.com)
Bitcoin: US$20,381 (-0.84%)
Ethereum: US$1,076 (-11.77%)
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