Morning wrap (21.06.2022)

• Indices from the Asia-Pacific region gained during today's cash trading. Nikkei jumped 2%, S&P/ASX 200 moved 1.3% higher and Kospi added 1%. Indices from China traded mixed

• US index futures are trading higher with S&P 500 futures trading around 50 points above Friday's cash close

• European index futures point to a slightly higher opening of the cash session on the Old Continent today

• RBA minutes showed that the Bank sees need for more rate hikes at the coming meetings

• RBA Governor Lowe said in a speech that 25 bp or 50 bp rate hike will be considered for July meeting. However, Lowe has cooled some market expectations by saying that he sees cash rate at 4% by year-end as a rather unlikely scenario

• Goldman Sachs now sees a 30% chance of US recession in the next 12 months, up from 15% in the previous forecast. According to Goldman Sachs, risk of recession in the next 2-year horizon increased from 35% to 48%

• Nomura expects the US economy to enter an extended recession this year. First GDP contraction is expected in Q4 2022

• South Korean exports increased 11% YoY in the first 20 days of June. Semiconductor exports were 1.9% YoY higher while exports to China dropped 6.8% YoY

• Cryptocurrencies trade higher with Bitcoin approaching a $21,000 area and Ethereum climbing back above $1,100

• Oil gains amid a broad improvement in moods on the global markets. WTI trades 1% higher and tests $110 per barrel area. Brent gains 0.7% and tests $115 area

• In spite of a US dollar weakness, precious metals trade mixed - gold and silver drop while platinum and palladium gain

• CAD and GBP are the best performing major currencies while NZD and CHF lag the most

Australian dollar gained after RBA minutes hinted at a need for more rate hikes. However, part of those gains was trimmed after a speech from Governor Lowe who said that expectations of a cash rate at 4% at year's end are rich. Nevertheless, AUDNZD continues to trade in a recovery move following a successful defense of the lower limit of a local market geometry. Source: xStation5