Morning wrap (23.11.2022)

6:49 AM November 23, 2022
  • US indices traded higher yesterday with all major Wall Street benchmarks gaining over 1%. S&P 500 and Nasdaq gained 1.36% each, Dow Jones moved 1.18% higher and Russell 2000 jumped 1.25%

  • Indices from Asia-Pacific traded higher today. S&P/ASX 200 gained 0.7%, Kospi moved 0.5% higher and Nifty 50 traded 0.2% higher. Indices from China traded up to 1.1% higher. Nikkei did not trade today due to Japanese holiday

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

  • The Reserve Bank of New Zealand delivered a 75 basis point rate hike, putting the official cash rate at 4.25%. Decision can be seen as hawkish as RBNZ opted for 50 bp up to this point and economists were divided whether it will go for 50 or 75 bp at today's meeting

  • RBNZ raised forecast for its peak rate from 4.10 to 5.50%

  • RBNZ Governor Orr said that if there will be a recession, it will be a shallow one. It was also said during post-meeting press conference that tightening cycle is closer to the end than to the beginning

  • According to the Wall Street Journal, the G7 group is set to impose a price cap on Russian oil in the $60-70 range. Reuters adds that the level is likely to be adjusted a few times a year. However, there are still some disagreements among EU countries and concessions for some countries look likely

  • Violent protests erupted at Apple's biggest plant in China as discontent over harsh Covid restrictions grew. In other news, it was reported that 5-day mass testing will be conducted in Chengdu, capital of Sichuan province

  • Wall Street Journal reported that Iran began to enrich uranium to weapon-grade at the second facility. This greatly reduces chances for revival of Iranian nuclear accord

  • API report pointed to a 4.8 million barrel draw in US oil inventories (exp. -2.5 mb)

  • Cryptocurrencies trade higher this morning. Bitcoin gains 2% and approaches $16,500 area. Ethereum trades 2.1% higher while Litecoin rallies 14%

  • Oil and precious metals trade little changed on the day

  • EUR and NZD are the best performing major currencies while CAD and JPY lag the most

NZDUSD gained after RBNZ delivered an outsized 75 bp rate hike. The pair is currently testing 0.62 resistance zone, marked with previous price reactions and 200-session moving average (purple line). Source: xStation5

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