Morning wrap (12.07.2022)

• US indices finished yesterday's trading lower. S&P 500 dropped 1.15%, Dow Jones moved 0.52% lower and Nasdaq slumped 2.26%. Russell 2000 dropped 2.11%

• Indices from Asia are also taking a hit. Nikkei drops 1.8%, Kospi pulls back 1.1% and indices from China traded 0.8-1.3% lower. Australian S&P/ASX 200 is outperformer with 0.1% gain

• DAX futures are pointing to a lower opening of the European cash session

• EURUSD approaches parity levels (1.00 area). A 1.0005 area was tested overnight and again this morning but the pair failed to break below

• China reported a jump in new Covid cases. Wugang city in Hunan Province was put into a 3-day lockdown.

• Fed's Bostic said that policy still remains accommodative and that economy can withstand another 75 basis point rate hike at next meeting

• White House Press Secretary Karine Jean-Pierre said that another highly elevated CPI reading is expected this week amid increase in gas prices

• Russia allowed operations to resume at the CPC oil terminal on Black Sea, exporting oil primarily from Kazakhstan 

• Cryptocurrencies are pulling back but scale of the moves is relatively small. Bitcoin drops 1% and trades near $20,000. Ethereum trades 2.6% lower and drops below $1,100

• Oil, as well as other energy commodities, pulls back. Brent and WTI trade around 1.4% lower at press time

• US dollar strength continues to pressure precious metals. Gold drops 0.3% while silver trades 0.6% lower

• USD and JPY are the best performing major currencies while GBP and EUR lag the most

EURUSD approaches 1.00 area. Parity levels were not seen on the pair since late-2002. A looming gas crisis in Europe, that is likely to trigger recession, and ECB's delayed tightening is playing a major role in the sell-off. EURUSD monthly interval. Source: xStation5