Morning wrap (21.07.2022)

• US indices added to previous gains and finished yesterday's trading higher. S&P 500 gained 0.59%, Dow Jones moved 0.15% higher and Nasdaq rallied 1.58%. Russell 2000 surged 1.59%

• Mixed moods could be spotted during the Asian session today. Kospi jumped 0.9%, Nikkei and S&P/ASX 200 booked small gains while indices from China traded lower

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

• EURUSD jumped back above 1.02 on reports saying that gas flows via Nord Stream 1 pipeline were resumed today. Gas flows are said to be at around 40% capacity so more or less pre-maintenance levels

• US President Biden said that he expects to talk with Chinese President Xi within 10 days

• Bank of Japan left interest rates and other monetary policy settings unchanged, in-line with market expectations. BoJ said that it still expects short- and long-term policy rates to remain at present or lower levels

• Italian Prime Minister Draghi is expected to announce his definitive resignation today at 8:00 am BST

• Japanese exports increased 19.4% YoY in June (exp. 17.5% YoY) while imports were 46.1% YoY higher (exp. 45.7% YoY)

• Tesla reported a 42% YoY jump in Q2 2022 revenue, to $16.93 billion (exp. $17.1 billion). EPS came in at $2.27 (exp. $1.81). Automotive gross margin dropped to 27.9% in Q2 from 32.9% in Q1 2022. Stock traded 1.5% higher in the after-hours trading

• Cryptocurrencies pulled back after an earnings report from Tesla revealed the company converted 75% of its Bitcoin holdings to fiat currency. Tesla said the move was aimed at boosting cash position amid lockdowns in China

• Brent is trading 0.3% lower on the day while WTI pulls back 0.6%

• Precious metals trade slightly lower. Gold drops 0.2%

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

EURJPY is one of the best performing G10 crosses today. EUR got a boost from Nord Stream flows resuming while JPY is lagging as Bank of Japan remains reluctant to tighten policy. Source: xStation5