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US stocks off lows despite tech jitters, ASX set to open higher

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Asian markets are set to open higher despite tech jitters in the US stocks overnight. The growth stock rout returned after a brief rally on Monday as Snap’s outlook downgrade triggered a renewed selloff in the tech shares. Wall Street finished off session lows but mixed. Dow eked out gains, while the tech-heavy Nasdaq slid more than 2%. Gold and bonds rose further amid risk-off trades, while oil steadied but seems losing direction.

Despite the continuation of the downtrend in the risk assets, signs of consolidation start bringing hopes that the stock markets may be approaching a bottom, with S&P 500 bouncing off session lows for the last few sessions. The FOMC meeting minutes to be released tomorrow could be a catalyst for investors to shake off the recent fears of a recession scenario, despite no clues for the Fed to change its rate-hike trajectory.

AU and NZ day ahead

The New Zealand Reserve Bank’s policy meeting to be held at 12 pm AEST is in the spotlight today, when a further 50-basis points rate hike is expected, pushing the NZ cash rate to 2%, the highest among the major central banks. Both AUD and NZD strengthened against the USD since mid-May due to a weakened king dollar as bonds yields fell amid recession concerns.

The S&P/ASX futures were up 0.11%, pointing to a slightly higher open in the ASX. The RBA Assistant Governor, Luci Ellis’s speech will be on a watch today.

NZX 50 was up 0.08% at the open, indicating a resilient session today. Pushpay opened higher, up 1.41%, to NZ $1.44 amid potential acquisition talks, leading gains in the local stock markets.

US

Wall Street bounce session lows after Snap wrecked tech shares and sent Nasdaq down more than 2%, while defensive stocks outperformed on safety demands. The Dow Jones Industrial Average eked out higher, the S&P 500 slid 0.79%, and Nasdaq fell .2.35%.

Growth sectors, including communication, services, consumer discretionary, and technology, led broad losses due to the tech rout, triggered by Snap's sharp slide of 43%, sending the other social platform stocks lower, with Meta Platforms down more than 7%. Tesla shares sank 6.9% as investors worry Elon Musk has to sell his stakes to close the Twitter deal.

EU

The broad European stock markets were lower following the US stock futures selloff. The Stoxx 50 (-1.64%), FTSE 100 (-0.39%), DAX (1.80%), CAC 40 (-1.66%). Read more

Commodities

Crude oil prices were little changed but firmed around the $110-mark as traders are assessing both bullish and bearish factors amid the global undersupply issues, and uncertainty about China’s lockdowns. In addition, a weakening US dollar offers support to the commodity prices.

WTI: US$109.77 (-0.47%), Brent: US$113.54(+0.11%), Natural Gas: US$8.80 (+0.59%)

Precious metals continue to rise amid mounting safe have demands and a weakened US dollar.

COMEX Gold futures: US$1,865.5 (+0.96%), COMEX Silver futures: US$22.12 (+1.8%)

Algaculture products were mixed.   

Wheat: US$1,154.75 (-2.96%), Soybean: US$1,693.00 (+0.36%), Corn: US$771.75 (-1.84%).

Currencies

The Eurodollar strengthened further against the US dollar amid ECB’s hawkish stance, also a safe haven currency, along with the Japanese Yen, and the Swiss Franc. However, major commodity currencies weakened against the USD.

(See the below FX rates at EAST 7:37 am, Bloomberg)

US dollar index: 101.76 (-0.33%)

EUR/USD: 1.0736

GBP/USD: 1.2532

USD/JPY: 126.84

USD/CHF: 0.9606

USD/CAD: 1.2821

AUD/USD: 0.7109

NZD/USD: 0.6460

Treasuries

Bonds yields fell amid risk-off trades.

US 10-year: 2.751%, US 2-year: 2.481%.

Germany bund 10-year: 0.963 %, UK gilt 10-year: 1.884%.

Australia 10-year: 3.313%, NZ 10-year: 3.445%.

Cryptocurrencies

The leading cryptocurrencies were mixed but consolidated above the recent lows, singing potential rebounding opportunities. The whole market cap dropped 0.52%, to US$1.276 trillion in the last 24 hours according to Coinmarketcap. On Tuesday, ECB President Christine Lagarde says Bitcoin and other cryptocurrencies are worth nothing, noting regulatory scrutiny is needed to protect inexperienced investors. Guggenheim Chief Investment Officer Scott Miner forecasted that Bitcoin could drop down to US$8,000 from the current level of just above US$29, 000.

(See below prices at AEST 7:46 am according to Coinmarketcap.com)

Bitcoin: US$29,522 (+0.47%)

Ethereum: US$1,971.89 (-1.38%)

XRP: US$0.4078 (-1 47%)

Cardano: US$0.5187 (-1.62%)

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