DAILY ANALISIS 03 AUGUST 2022

US indices finished yesterday’s trading lower after a volatile session. S&P 500 dropped 0.67%, Dow Jones moved 1.23% lower and Nasdaq dipped 0.16%. Russell 2000 dropped 0.05%

Pullback on the stock market was accompanied by a sell-off on US bond markets. US 10-year Treasury yields jumped 17 basis point yesterday, to 2.75%

Moods deteriorated yesterday in the evening after China said it will hold live fire drills around Taiwan. Chinese state media said that People’s Liberation Army will exercise “liberating Taiwan”

Moods during the Asian session were mixed – S&P/ASX 200 dropped, Nikkei and Kospi gained while indices from China traded mixed

DAX futures point to a more or less flat opening of the European cash session today

Japanese officials reported that there was movement of Russian navy in recent days suggesting that Russian ships may join Chinese navy in exercises near Taiwan

China has also banned imports of over 2,000 food products from Taiwan and suspended exports of natural sand and gravel to the island

The Chinese UK ambassador warned UK politicians not to visit Taiwan as it would have serious consequences for China-UK relations. Warning came after Guardian reported that group of UK MPs plan to visit Taiwan later this year

Fed’s Bullard said that it looks like both Fed and ECB will be able to rein in inflation and achieve soft landing

API report pointed to a 2.16 million barrel build in US oil inventories (exp. -0.4 mb)

Major cryptocurrencies are trading mixed – Bitcoin drops 0.7%, Ethereum moves 1.7% lower and Ripple dips 1.9%

Oil is trading higher today. Brent gains 1% and climbs back above $100 per barrel mark

Precious metals benefit from USD weakness – gold and silver gain 0.5% each

AUD and EUR are the best performing G10 currencies while USD, GBP and JPY lag the most

S&P 500 (US500) snapped a 3-day winning streak this month and traded lower for the second day in a row yesterday. Index is retesting a 4,100 pts price zone, this time as a support. Note that reversal occurred just slightly below the upper limit of the Overbalance structure, hinting that downtrend remains in play.