Italian politics complicate the ECB's task
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Update time : 2022-07-22 21:42:47
The appetite for risk seen earlier this week is fading. Yesterday’s US equity gains helped lift most of the large markets in the Asia Pacific region, but China’s CSI 300 fell 1.1%, giving back most of this week’s gains as credit issues from the property sector haunt sentiment. Europe’s Stoxx 600 is trading heavily ahead of the ECB meeting outcome. US futures are also trading off. Benchmark 10-year yields are firmer with the US Treasury near 3.05%. European yields are mostly 3-6 bp higher, but Draghi’s second resignation is weighing on Italian bonds, where the 10-year has jumped 15 bp. The US dollar is trading higher against most currencies. The New Zealand dollar (~-0.8%) and the yen (~-0.45%) are the weakest. The Swiss franc and euro are fractionally lower. Emerging market currencies are mostly lower, lead by the Russian rouble (~-2.5%) and the Hungarian forint (-0.9%). The Turkish lira is off by around 0.4% ahead of its central bank decision (expect one-week repo to be unchanged at 14%).
The main theme of domestic favourable macro front remains unchanged, SHFE aluminium prices showed a ‘v-shaped’ rebound today
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