Morning wrap (26.08.2022)

• US indices had a solid session yesterday with all major Wall Street benchmarks booking significant gains. S&P 500 gained 1.41%, Dow Jones moved 0.98% higher and Nasdaq jumped 1.67%. Russell 2000 gained 1.52%

• Stocks in Asia traded mostly higher during the final trading session of the week. Nikkei gained 0.5%, S&P/ASX 200 moved 1% higher and Kospi traded flat. Chinese indices gained but scale of those gains did not exceed 0.2%

• DAX futures point to a slightly higher opening of the European cash session today

• Fed Bullard said that he sees rates increasing to 3.75-4.00% this year. Fed Harker said would like to see rates go beyond 3.4%, what would allow the Fed to relax a bit. Fed Bostic said that should the data remain strong, the case for another 75 basis point rate hike will be there

• Reuters reported that ECB may soon begin talks on ending APP reinvestments. However, report note that decision on the matter is not urgent and unlikely to be taken at the next meeting

• RBNZ Governor Orr said that he sees at least two more rate hikes in this cycle. Moreover, he said that RBNZ expect the country will experience technical recession

• Josep Borrell, EU representative for foreign affairs and security policy, said that the US answer to Iran is a reasonable counterproposal. Contrary to earlier media reports, US did not outright reject Iranian proposal, nor did Iran reject US counterproposal

• The United States canceled 26 flights from the US to China in September, operated by Chinese carriers. The move is a retaliation for China canceling some flights operated by US carriers due to Covid concerns

• Cryptocurrencies are trading lower - Bitcoin drops 0.7% while Ethereum plunges 2%. EOS and Kyber trade over 5% lower

• Oil is trading slightly higher this morning with WTI trading a touch above $93 per barrel

• Precious metals pull back slightly amid USD strengthening. Gold drops 0.2% at press time

• USD and CHF are the best performing major currencies while NZD and AUD lag the most

Somewhat more optimistic comments on the progress in Iranian nuclear talks pushed oil prices lower yesterday. WTI (OIL.WTI) failed to break above the resistance zone marked with 23.6% retracement of a recent downward impulse as well as 200-session moving average (purple line). Source: xStation5