• The US consumer confidence fell.

Global Highlights

Dollar Index – The dollar gained 0.57% to 105.106. The consumer confidence index fell to 98.7 in June from 103.2 in May. The poor data adds fears of a recession as the Fed maintains its aggressive rate hike to address inflation. With inflation expectations remaining high, we are of the view that the economy is at a point of inflection where spending remains strong but not on the sentiments and financial markets.

US equities & sovereign bonds – Wall Street was mixed where Dow Jones up 0.27% to 31,029, S&P 500 dropped 0.07% to 3,819 and Nasdaq down 2.98% to 11,182. The UST10Y benchmark yield was down 8.24bps to 3.089%, and the UST2Y was at 3.039%.

Euro – The euro lost 0.73% to 1.044 due to a stronger dollar. European Central Bank is mindful over the coming months with the prospect of inflation pressuring up alongside the risk of a consumer-led slowdown the region.

British pound – The pound weakened by 0.49 % to 1.212. The Bank of England has warned that the US should expect higher inflation numbers than other major economies during the current energy crisis and the effect from Brexit.

Japanese yen – The yen lost by 0.50% to 136.14. The Bank of Japan will maintain its ultra-loose monetary policy and reaffirms that the country is not affected that much from the global inflationary trend.

Chinese yuan – The yuan gained by 0.11% to 6.701. According to the U.S.- based China Beige Book, Chinese businesses reported a slowdown in the second quarter this year, reflecting the prolonged impact of the zero-Covid policy.

Korean won – The won down 1.22% to 1,299.38. South Korean consumers turned more pessimistic on the economic outlook, as the composite consumer sentiment index dropped from 102.6 in May to 96.4 this month due to rising inflation and high debt burdens affecting their spending.

Australian dollar – The Australian dollar depreciated 0.41 to 0.688. The retail sales rose by 0.9% in May, beating expectations despite the high prices environment. Data showed consumers spent more on eating out and in department stores.

Source: AmInvest Research - 30 Jun 2022