Sunset Market Commentary – Action Forex | Omd Cialis


Core bond yields started the new month in good spirits on Monday. German yields rose up to 7 basis points and a little less in the US. This came even amid disappointing retail sales in Germany, which unexpectedly fell 1.6%m/m in June on cuts in non-essential items as inflation hits. In the absence of a fundamental driver, we would characterize the move as an attempt to bottom after falling dramatically throughout July. A “try” because it didn’t take long. First Gains gradually, if not completely, evaporated as inflation expectations faded. This, in turn, was linked to the news that the first (of potentially many) ships carrying tons of agricultural products left one of the Ukrainian ports (see headline). This puts agricultural commodities under pressure. Oil like oil is also losing in a daily perspective. Brent is trading at $101/bbl after hitting resistance around 106.55 (50 dMa) last Friday ahead of this Wednesday’s OPEC+ meeting. But then Word has gotten around that House Speaker Pelosi will indeed visit Taiwan during her Asian tour that began today. China has repeatedly warned about this and never left out threats. It is stoking geopolitical tensions beyond Russia and the western world, triggering refugee flows. European swap yields are trading mixed between +1 and -1bp. 10-year risk tests support around 1.63%. German yields fall between 2 and 3.1 basis points along the curve. However, peripheral spreads narrowed slightly. Italy (-8 basis points) outperforms peers as the 10-year yield fell below 3% for the first time since late May. Bloomberg reported last week that the Survey leader Giorgia Meloni (Brothers of Italy) wants to stick to the (budget) commitments needed to access the 200 billion euros in EU funds. US yields are erasing gains of up to 6 basis points to just 0.3 basis points on the front lines, losing up to 4 basis points further out as markets head for the release of the US industrial ISM (expected to rise from 53 to 52 sink). Stocks were holding up well until the Pelosi news. Both European and US stocks fall, with the latter underperforming (-0.6%).

The dollar remained on the defensive. The euro initially benefited, helped in part by the faster rise in yields. EUR/USD hit an intraday high of 1.027 just inches from intermediate resistance at 1.028. However, as bond yields eased, so did the pair (currently 1.024). The dollar on a trade-weighted basis (DXY) continues to drift south (105.55) on the back of a stronger and (for the third consecutive month) outperforming yen. USD/JPY, now at 132.3, is approaching 131.25 strong support. Sterling shows no signs of nervousness going inside Bank of England meeting on Thursday. The Queen’s Money is strengthening against both the Euro and the Dollar. EUR/GBP falls to 0.836 with technical potential at 0.83 as it heads towards the BoE. GBP/USD jumps to 1.224, extending the bottoming process that has been ongoing since mid-July. newspaper headlines

Hong Kong’s economy rebounded from a -2.9% qoq contraction in the first quarter, with growth of 0.9% in the second quarter of this year. That was a lot though less than the expected 3%. Compared to the same period of the previous year, growth is now down by 1.4%. A government spokesman accused ongoing disruptions in cargo flow between Hong Kong and mainland China, and the recent surge in Covid-19 infections and tightening financial conditions. Details showed that private consumption only stagnated after a 5.8% decline in the first quarter with strict quarantine restrictions on inbound travelers holding back tourism. Exports of goods also suffered from falling flows to the mainland, the US and the EU as foreign demand slowed. The Hong Kong dollar barely moved as this is the case already flirted with the upper limit of the tolerance range of 7.75/7.85. For weeks, the HKMA has been massively intervening in the foreign exchange market.

A cargo ship loaded with more than 26,000 tons of corn left the Ukrainian port of Odessa for Lebanon. It is the first overseas shipment since Russia invaded the country in February and marks one important step in unlocking millions of tons of stored crops. This is crucial for to avert the threat of a global food crisis. The delivery follows the July 22 agreement to create safe shipping corridors through three ports of Ukraine. Agricultural commodity prices, led by corn (-2.4%), all declined today.

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