The Australian and New Zealand Dollars have taken a beating as risk aversion spreads throughout markets, but the Euro, Yen, and Swiss Franc have risen with the greenback.
All of the main indices on Wall Street finished the cash session in the negative, and the futures prices have fallen even more since the end. The negative sentiment appeared to have started with soft personal spending figures from the United States. The S&P 500 has seen the worst performance in 5 decades. Alongside the odd exception of Australia’s ASX 200, APAC stocks have fallen with them for the third day in a row.
Even if China’s Caixin PMI came in at 51.7 instead of the predicted 50.2, it was not sufficient to stop the risk aversion flow.
When OPEC+ announced they will restart all the barrels that were taken offline due to the pandemic, crude oil prices fell once more. The price movement was also hindered by the perception of an oncoming recession.
Despite falling Treasury yields, gold has kept falling. Having briefly surpassed 3.5 % some weeks prior, the benchmark 10-year note is now under 3%. Gold could potentially be losing its charm due to a stronger US dollar.
The RBA meets next on July 5, and the market anticipates a 50 bps rate increase although the AUD is now in freefall.
Along with a number of European CPI readings, PMI data from throughout Europe and the US are also forthcoming. Next, attention will turn to ISM and construction expenditure information. The US Dollar index (DXY) is currently trading within a band of 103.42 and 105.79. These ranges might serve as corresponding resistance and support.
The simple moving averages (SMA) for the short, mid, and long term all have positive slopes and are all under the price. After surpassing the 10-day SMA, this can be a sign of an upcoming bullish sentiment.
