Market Commentary - August 10, 2022

Wall Street equities declined modestly on Tuesday as investors are now waiting for the U.S. CPI data, with its results expected to have a strong influence on the Fed’s plans of monetary tightening. Both the S&P 500 and Nasdaq indices dipped 0.42% and 1.19% respectively.

European shares mirrored the performance of the U.S. counterparts yesterday, as investors also cautiously waited for the U.S. inflation data, with the broad benchmark STOXX 50 dropped over 1%. Uncertainty and volatility of the markets remain high due to slower growth and squeeze on Europe’s natural gas supplies over the winter months, all such factors impacted investors’ sentiment.

Across Asia, all the major local indices did not fare well on Wednesday as practically all market participants are looking ahead for the release of the U.S inflation data. HK’s Hang Seng Index shed as much as 2.2%, with the tech stocks leading the decline, while China’s CSI 300 benchmark down by 1%. On the other hand, Lhasa, which is the capital of Tibet, currently implemented partial lockdown over first Covid outbreak in two years.

Price of WTI crude fell on Wednesday as U.S. crude inventories unexpectedly rose last week, currently trading at $90.28 per barrel. Gold prices continue to edge up step-by-step to $1,791.24 per ounce, likewise, the U.S. dollar continue to strengthen against the Turkish lira, touched the key level of 18 once again since yesterday.

FTSE 100 chart (2022.8.10)

Figure 1 (Source: IS Prime) FTSE 100 daily: UK’s blue-chip index has been rallying for the past weeks, reaching a high since early June.

Headliner to Review

  • Business confidence indicator in Australia has strengthened in July, from 2 in the previous month to the current figure of 7, with the construction sector saw a notable pickup.

Headliner to Watch

  • The latest U.S. CPI data is due to release this evening, it might reveal some cooling of the recent price pressures as it is forecasted to raise 0.2% month-to-month.
  • We would also expect to see the release of the July PPI statistics from the U.S., as previously it rose 1.1% in June, accelerating to an annual rate of 11.3%.

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Authors:
Antony Tan
Kerry Man