Morning wrap (05.07.2022)

• Moods during today's Asian session were mostly upbeat. Nikkei gained 1%, S&P/ASX 200 moved 0.6% higher and Kospi added 1.6%. Indices from China lagged and traded up to 0.7% lower

• US and European index futures are trading higher ahead of the opening of the cash session on the Old Continent

• Reserve Bank of Australia delivered a 50 basis point rate hike, putting the main interest rate at 1.35%. The move was in-line with market expectations. The Bank did not offer any new guidance but repeated that it is committed to do what's necessary to halt inflation

• US Treasury Secretary Yellen spoke with Chinese Vice Premier Liu He. Discussion was on economy, supply chains as well as challenges resulting from Russia-Ukraine war

• According to Wall Street Journal report, US President Biden may remove tariffs on some Chinese goods as soon as this week

• Output at 3 Norwegian oil fields were halted yesterday due to employees' strike. Production at another 3 fields is expected to be halted today. Reuters reports that as much as 25% of Norwegian natural gas output may be impacted and 15% of oil output

• According to Reuters report, China plans to set up an infrastructure fund worth 500 billion yuan (~$74.7 billion)

• Chinese services PMI (Caixin/Markit) for June jumped from 41.4 to 54.5 (exp. 49.0)

• Cryptocurrencies trade higher. Bitcoin and Ethereum gain over 2% while Polygon rallies 10%

• In spite of news of output halt in Norway, oil is trading lower. Brent and WTI drop around 0.4% each

• Precious metals benefit from USD weakness. Gold gains 0.2% while silver trades 0.7% higher

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

AUDUSD is trading slightly higher today but the move is primarily driven by USD weakness. AUD did not experience any major reaction to the RBA decision as it was in-line with market expectations. Source: xStation5