China reported nearly 700 new COVID cases, the most since May
After a positive start to the session, US stocks reversed to finish lower overnight. Wall Street stocks were pressured by a report on Apple planning to slow hiring and spending for some teams in 2023. Although the giant highlighted that it’s not companywide and won’t affect all roles, the overall sentiment turned sour on the announcement. As a result, the S&P 500 closed down by 0.8% while the Nasdaq finished lower by 0.8% and the Dow gave up 0.7%. Also, equities failed to preserve gains as recession fears continued to persist.
In Asia, stocks traded mostly lower on Tuesday after a positive start to the week as China reported nearly 700 new COVID cases, the most since May, raising concerns about the damaging impact lockdowns have on China’s economy and the world. Still, the Shanghai Composite managed to get back to the flat-line following the initial drop. Elsewhere, the S&P/ASX 200 lost 0.56% after the the Reserve Bank of Australia’s meeting minutes showed that the board saw current rates as being “well below” the neutral rate.
European equities opened lower on Tuesday amid the ongoing concerns about a gas crisis in the region while political instability adds to uncertainty. In the UK, the Conservative Party leadership contest is entering its fourth round of ballots among MPs. On the data front, the UK’s official jobless rate stood at 3.8% in May versus the previous 3.8%, in line with estimates, while the number of people claiming jobless benefits fell by 20K in June when compared to -34.7K in the previous month.
In currencies, the dollar trades on the softer side to start the day. A turn in risk sentiment triggered some rebound in the greenback late on Monday. But the USD failed to shrug off the pressure, threatening the 107.00 mark in early European deals. Against this backdrop, EURUSD keeps targeting the 1.0200 figure, but the upside potential remains limited, especially as traders are getting more cautious ahead of the ECB policy meeting due on Thursday. Another failure around 1.0200 would trigger a retreat towards 1.0120, followed by parity.