Morning wrap (20.05.2022)

• US indices finished yesterday's session lower but magnitude of a drop was much smaller than the day before. S&P 500 dropped 0.58%, Dow Jones moved 0.75% lower and Nasdaq was down 0.26%. Russell 2000 outperformed and gained 0.08%

• Indices from Asia-Pacific traded higher today, recovering much of yesterday's drop. Nikkei gained 1.3%, S&P/ASX 200 moved 1.1% higher and Kospi added 1.8%. Indices from China traded 1-2% higher

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

• People's Bank of China cut the 5-year Loan Prime Rate from 4.60 to 4.45%. 1-year Loan Prime Rate was left unchanged at 3.70%

• Fed Kashkari said that a lot of accomodation was removed via forward guidance but rates will need to rise further. He also said that end-levels for Fed funds rate in the current cycle will depend on supply side

• ECB minutes released yesterday suggested that there is a high chance for a rate hike in July

• United States said that purchases of Russian oil by China in order to replenish strategic reserve will not contravene Western sanctions

• A likely case of a monkeypox was identified in New South Wales, Australia

• New Zealand credit card spending increased 1.1% YoY in April (exp. 1.6% YoY)

• Cryptocurrencies are trading mixed - Bitcoin drops 0.5% while Ethereum gains 0.4%. Overall, scale of moves on the cryptocurrency market is small today

• Precious metals are trading higher, thanks to USD weakness. Gold and platinum add 0.2%, silver trades 0.5% higher and palladium rallies 1.7%

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

Precious metals are trading higher amid weakening of the US dollar. Silver is attempting to make a move back above the $22.00 price zone that served as a lower limit of trading range since September 2020. Source: xStation5