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While the US dollar continued appreciating against other major currencies with the exception of the CAD and JPY which stabilised after the recent market moves, in emerging markets the sentiment was still quite mixed.
Palladium and silver prices further extended the losses from the previous days, while gold prices were relatively stable. 10y T-Note yields remained around the 1.2% level and briefly fell even below 1.14%.
After some moderate recovery in equity markets, major equity index futures in the US and Europe were overall in the red by Wednesday morning. The Volatility Index VIX however was trading at the lower end of the range compared to what was observed in the previous trading day.
In the early morning hours on Wednesday Bitcoin and other cryptos strongly recovered, with Bitcoin trading again close to $31k. Within just half an hour between 4:00 AM GMT and 4:30 AM GMT Bitcoin prices rose by $810, which represents a rise by more than 2.7 %. While the total crypto market cap again reaches the $1.3 trillion mark, the trailing 7-days performance of all major top 10 cryptos (not including stablecoins) is still significantly negative with Ethereum being the best-performer trading a bit less than four per cent down over that period.
After reaching yet another four months low on Tuesday, the EUR/USD was once again in the red by Wednesday morning, given the strength of the dollar. The euro itself was relatively stable against other majors like the JPY and CHF, while further improving in the EUR/GBP pair, which reach a new eight weeks high.
German producer price index (PPI) data indicated a further accelerating inflation as the annualised statistic climbed from 7.2 % in the previous month up to 8.5 % inflation in June. US data on the housing market was a bit mixed, with housing starts exceeding expectations at 1.643 million in June, while permits unexpectedly fell below 1.6 million.
On Wednesday Italian industrial sales data and US mortgage market data will be released.
While a clear improvement in most major European stock market indices could be seen on Tuesday, the move was in most cases still far from enough to offset the steep losses from Monday.
The German ERP software company SAP SE traded moderately higher in early trading after the announcement that the total revenue in the past quarter rose by three per cent to €6.67 billion. The guidance was also slightly improved for this year, indicating earnings between €7.95 billion and €8.25 billion, which is still a bit below the results of 2020.
Besides SAP other companies like Novartis, Iberdrola, Daimler and ASML Holding are also releasing their results on Wednesday. Then on Thursday results from Unilever, ABB and Valeo can be expected to publish their numbers.
Oil prices strongly rebounded higher after the dip around the time the US trading session started. However, at the end of the day another retracement erased all intraday gains following the release of the weekly statistical bulletin by the American Petroleum Institute (API), which indicated that crude oil stockpiles were up for the first time in nine weeks, with a build of 0.8 million barrels being reported for the week ending July 16. The increase in gasoline stockpiles by 3.3 million barrels could have also reinforced the significance of the data.
On Wednesday the Energy Information Administration (EIA) reports its weekly data on crude oil, gasoline and distillate inventories.
Major US stock market indices robustly rebounded higher at the start of the regular trading session on Tuesday. The small-caps index US 2000 moved over the course of the day up by 2.8 % and thus recovered losses that accumulated since Thursday.
Especially stocks related to the travel industry traded robustly higher taking four out of the top 5 positions of the day among S&P 500 components. This comes after a significant drop in valuation over the previous week as even with these gains American Airlines (+8.59%) trades just around the levels before the sell-off taking place on Friday. A similar chart pattern is visible also among Royal Caribbean (+7.51%) and Norwegian Cruise Line (+8.51%) stocks, which also still trade deep in the red on a monthly basis.
Netflix stocks ended the extended after-hours session with moderate gains despite disappointing investors with earnings-per-share of only $2.97, while revenue at $7.34 billion was mostly in line with expectations. The company however positively surprised announcing a net paid subscriber addition of 1.54 million and also confirmed its move into the gaming sector.
For Wednesday quarterly results from companies including Johnson & Johnson, Verizon, Coca-Cola and others can be expected. Then on Thursday American Airlines, Domino’s Pizza, AT&T, Twitter and Snap are releasing their results.
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