Daily summary: Global stocks in retreat ahead of tomorrow's Fed decision

9:05 PM June 14, 2022

  • Major European indices closed lower. Despite initial attempts to recover from yesterday's declines, bears once again dominated trading floors. Swiss SUI20 (-1.87%) and the Spanish SPA35 (-1.37%) were among the worst performers. On the other hand, the Polish W20, gained more than 1.3%.
  • The ZEW Current Conditions subindex in Germany increased to -27.60 points in June from -36.50 points in May. Figures compare with market forecasts of -31.However, the expectations sub-index did not live up to expectations as it amounted to -28.0 (expected -27.5). Overall, the reading was rather neutral and did not contribute much to the ongoing downtrend.
  • Mixed moods prevail on Wall Street - Dow Jones fell 0.70%, S&P 500 dropped 0.60%, while Nasdaq rose nearly 0.1%. The 10-year US Treasury note yield skyrocketed above 3.45% for the first time since April of 2011 as investors have dramatically increased their bets that the Federal Reserve will raise interest rates by 75 basis on Wednesday.
  • PPI inflation for May in the US slightly decreased to 10.8% YoY from 10.9%, below expectations of 10.9%. In monthly terms, PPI inflation is rising by 0.8% MoM against the forecast of 0.8% and at the previous level of 0.4%. In turn, the core PPI inflation fell to 8.3% YoY against the expectation of 8.6% and the previous level of 8.6%. The core PPI inflation is rising by 0.5% MoM against expectations of 0.6% MoM and at the previous level of 0.2% MoM.
  • More and more companies are announcing mass layoffs due to recession fears. The shares of Coinbase (COIN.US) fell over  4.5% following news that crypto exchange planned layoff of 18% of employees as it expects worsening macroeconomic environment and "crypto winter". Redfin (RDFN.US) also announced the layoffs of nearly 8% of its workforce due to the decline in demand for the company's services. The management board of the real estate company emphasized that the number of transactions made on the market may decline in the perspective of years, not months.
  • EUR and USD are the best performing major currencies, while GBP and NZD lag the most.
  • Today we observe high volatility in the commodity market. NATGAS prices fell sharply following news that Freeport terminal is suffering more severe problems and the gas export and liquefaction infrastructure may be out of service for up to 3 months, compared to the initial 3 weeks.
  • Gold fell below major support at  $1,820 an ounce after falling nearly 3% in the previous session, while silver broke below psychological $21.00 level.
  • Oil prices erased early gains and returned to the daily lows. Brent trades above $122.00 per barrel, while WTI is testing $120.50 level. Senator Ron Wyden, who is known as an ally of President Biden, proposed that oil companies that record a profit margin better than 10% would face a new federal 21% surtax.
  • Pessimism still prevails on the cryptocurrency market, however bulls become a bit more active. Early in the session Bitcoin fell to $21,000, however bulls managed to erase some of the losses. Currently the most popular cryptocurrency trades around $22300, while Ethereum returned above $1200 level. Smaller projects are performing better, and some of the like Ripple or Cardano recorded small gains.   

USDCHF - buyers managed to erase early losses and the pair reached parity. Source: xStation5

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