UST yield inversion up to 36Bps, widest gap since 2000. Recession fears are rising again, amid BoE Rate hike to 1.75% (+50Bps) and US Change in Nonfarm Payroll Jul. which is projected to fall 33% (Surv. 250K; Jun. 372K), causing Wall Street stock markets to close mixed, and yields on UST2Y and UST10Y at 3.05% and 2.69%, respectively. Concerns that could potentially hamper energy demand caused WTI and Brent October 2022 contracts to fall 2.5% to USD87.56/Barrel and USD94.12/Barrel, respectively, or their lowest levels before the Russia-Ukraine conflict in February. The Nonfarm Payroll indicates the strength of the US labor market, one indicator that alleviate fears of a recession in July.
2Q22 GDP was more expansive, pushing JCI above the psychological level of 7,000. BI’s Dovish commitment maintains economic growth momentum, making 2Q22 GDP projected to grow 5.17% YoY (Vs. 1Q22 5.01% YoY). Besides BI 7DRRR being maintained at a low level of 3.50%, the 2Q22 economy was supported by loose mobility which then boosted consumption and production levels during Ramadan and Eid. Meanwhile, the strengthening of the technology sector, which rose more than 3% yesterday, once again supported the JCI to close at 7,057. NHKSI Research projects that JCI will move Bullish with Support: 7025-7000 / 6950-6925, Resistance: 7070 / 7100 / 7150-7175, with the recommendation to Set Your Trailing Stop.
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