European Open: EUR/AUD looks week ahead of German PPI

Research
Matt Simpson financial analyst
By :  ,  Market Analyst

Asian Indices:

  • Australia's ASX 200 index rose by 26.2 points (0.4%) and currently trades at 6,647.80
  • Japan's Nikkei 225 index has risen by 185.43 points (0.7%) and currently trades at 26,664.20
  • Hong Kong's Hang Seng index has risen by 72.46 points (0.35%) and currently trades at 20,870.41
  • China's A50 Index has risen by 3.92 points (0.03%) and currently trades at 14,365.89

 

UK and Europe:

  • UK's FTSE 100 futures are currently up 10.5 points (0.15%), the cash market is currently estimated to open at 7,166.87
  • Euro STOXX 50 futures are currently up 11 points (0.32%), the cash market is currently estimated to open at 3,464.97
  • Germany's DAX futures are currently up 40 points (0.31%), the cash market is currently estimated to open at 12,796.32

 

US Futures:

  • DJI futures are currently down -22 points (-0.07%)
  • S&P 500 futures are currently down -14 points (-0.12%)
  • Nasdaq 100 futures are currently down -3.75 points (-0.1%)

 

20220714futuresCI

 

AUD powers ahead on strong employment data

The Australian dollar is the strongest major of the session on the back of its job figures, whilst the yen is the weakest as yield differentials continue to drive currency trends. The US dollar continued to march higher in the Asian session following a stronger than expected inflation report in the US, which saw USD/JPY hit its highest level since September 1998.

The Australian employment situation goes from strength to strength, with unemployment falling to a 48-year low of 3.5%, 88.4k jobs added (30k expected – 52.9k of which was full-time work and the participation rate hitting a record high.

 

Read our guide on the Australian Dollar

 

 

German PPI data at 07:00 BST

German wholesale prices are released at 16:00. But with it rising 22.9% in May, would it really change much if it rose to 25% in June when with economic sentient in the gutter as consumer prices continue to rise. Still, traders will continue to assess the rate of change – and it provides another ‘fear input’ for economists with US inflation continuing to surprise to the upside.

 

EUR/AUD 1-day chart:

20220714euraudCI

With economic data between Australia and Europe continuing to diverge, EUR/AUD might be about to extend its downside move. The cross found a top at the beginning of July with a 2-bar bearish reversal around the 200-day eMA. Bearish momentum accelerated, prices then consolidated – and now momentum is pointing lower again. Assuming the corrective high was around 1.5400 then it could be headed bac for the lows around 1.4400. The bias remains bearish below 1.5000, with a break beneath 1.4760 bringing the 1.4600 handle into focus.

 

FTSE 350 – Market Internals:

20220714moversFTSEci

FTSE 350: 3970.02 (-0.74%) 13 July 2022

  • 83 (23.71%) stocks advanced and 262 (74.86%) declined
  • 2 stocks rose to a new 52-week high, 12 fell to new lows
  • 18% of stocks closed above their 200-day average
  • 27.71% of stocks closed above their 50-day average
  • 8.86% of stocks closed above their 20-day average

Outperformers:

  • + 11.41% - Johnson Matthey PLC (JMAT.L)
  • + 9.14% - Clarkson PLC (CKN.L)
  • + 4.56% - Darktrace PLC (DARK.L)

Underperformers:

  • -8.33% - J D Wetherspoon PLC (JDW.L)
  • -6.57% - Aston Martin Lagonda Global Holdings PLC (AML.L)
  • -5.81% - Essentra PLC (ESNT.L)

 

Economic events up next (Times in BST)

20220714calendarBST

 

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