Morning wrap (22.08.2022)

• Stocks in Asia are trading mixed at the start of a new week - Chinese equities gain following PBoC rate cut while indices from other parts of Asia-Pacific drop. South Korean Kospi is one of top laggards with 1.2% decline at press time

• US and European index futures are trading slightly lower

• People's Bank of China cut 1-year Loan Prime Rate from 3.70 to 3.65% (exp. 3.60%) while 5-year Loan Prime Rate was cut from 4.45 to 4.30% (exp. 4.35%)

• Russia will shut down the only remaining gas turbine in the Nord Stream I pipeline for 3-day maintenance, starting on August 31, 2022. After maintenance flows will be restored to around 20% capacity (current levels)

• German economy minister Habeck said that Germany faces a very difficult winter if gas supplies are tightened further but there is a good chance that drastic energy measures will not needed

• RBNZ Deputy Governor Hawkesby said that cash rate may increase to 4.00-4.25% until the Bank has a more balanced view. He also said that rate hikes of 25 and 75 basis points were also considered before Bank decided to deliver 50 bp rate hike at the latest meeting

• South Korean exports increased 3.9% YoY in the first 20 days of August. Imports were 22.1% YoY higher. Semiconductor exports were 7.5% YoY lower while exports to China dropped 11.2% YoY

• Cryptocurrencies are pulling back slightly although scale of moves is relatively small. Bitcoin drops 0.6% while Ethereum trades 1.3% lower. Dogecoin drops 2.5%

• Oil drops slightly this morning. Brent drops 0.6% while WTI trades 0.7% lower

• Precious metals trade little changed - gold and platinum trades 0.2% lower, silver drops 0.1% while palladium gains 0.3%

• AUD and NZD are the best performing major currencies while JPY and CHF lag the most

Chinese index CHNComp gains following PBoC rate cut and is trying to bounce off the 6,650 pts support zone. However, the long-term outlook is more bearish with the index trading in a wide downward channel. Source: xStation5