Financial Markets Today: Quick Take – July 13, 2022 Financial Markets Today: Quick Take – July 13, 2022 Financial Markets Today: Quick Take – July 13, 2022

Financial Markets Today: Quick Take – July 13, 2022

Macro 6 minutes to read
Saxo Strategy Team

Summary:  Recession angst remains the key focus across markets low on liquidity due to the current holiday season. Stocks traded lower on Tuesday after a fake 10.2% YoY CPI number circulated on Wall Street before being denied. It shows the markets nervousness ahead of today’s US inflation report, which is expected to show an acceleration to a fresh four-decade high just below 9%, thereby supporting another big rate hike from the FOMC on July 27. The IMF downgraded US growth for the second month in a row with a deepening inversion of the US yield curve pointing to a recession. Commodity prices across all sectors remain under pressure, with crude oil and copper plunging to fresh lows for the cycle.

The Saxo Market Call podcast is on holiday and will return later this month.

What is our trading focus?

Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I)

US equity futures trade defensively ahead of today’s US CPI overnight after slumping late in the session on Tuesday after a fake 10.2% YoY CPI number circulated on Wall Street. The BLS quickly denied an early release, but it highlights the markets nervousness in thin trading conditions with today’s numbers seen as critical as market fear a print close to 9%. Weakness was led by megacap technology stocks and energy shares after oil plunged below $100 per barrel. As mentioned, it is worth noting that the trading volumes across the US equity market remains low, reflecting the current holiday season where liquidity dries up, thereby raising the risk of higher volatility. Into the earnings season, traders will be watching whether corporate America is resilient enough to pass on higher costs to consumers. 

Hong Kong’s Hang Seng (HSI.I) and China’s CSI300 (000300.I)

Modest gains were seen overnight following recent losses with the Hang Seng TECH Index (HSTECH.I) rallying 1%. Bilibili (09626:xhkg) and iDreamSky (01119:xhkg) surged more than 3% after getting licenses (Banhao) for new games.  Oil and gas, and mining stocks all fell in response to the continued drop in commodity prices.  New energy stocks, such as Longi Green Energy (601012:xssc) and Xinjiang Goldwind (02208:xhkg) gained over % and 8% respectively.  

EURUSD finds support from options traders after hitting parity

The dollar’s continued push higher against most major currencies saw it briefly print parity against the euro on Tuesday, a twenty year low for the common currency before it bounced back. However, with US rate hikes continuing and the ECB stuck in neutral amid a sharp European economic slowdown, the market has not yet given up the idea of a break lower towards the next key support level around €0.96. For now, a wall of derivatives bets is keeping the euro above with traders holding options defending the parity strike which has steadily become the most traded options strike. Apart from US CPI and a hawkish FOMC, the market will be watching developments in the European gas market, not least whether supplies on the Nord Stream 1 pipeline will resume next week following maintenance.

Crude oil (OILUKSEP22 & OILUSAUG22)
The current battle between tight fundamentals and financial traders trying to position for an incoming recession took a step up on Tuesday with WTI and Brent crude oil both plunging below $100 a barrel as escalated fears about an economic slowdown sent ripples across a holiday thinned market. The inversion of an important part of the US yield curve sent a recession signal and it helped drive speculative selling, however, with both contracts managing to find support at the lower end of the range that has been in play since March. OPEC and the IEA in separate announcements both highlighted the risk of tight supply driving prices higher. This battle between “paper” and physical oil traders will keep volatility elevated but, in our opinion, we are unlikely to see an industrial metal styled correction. Focus today on IEA’s monthly Oil Market Report, EIA’s weekly inventory report and US CPI.

 US Treasuries (TLT, IEF)

The US 10-year yield held below 3% on Tuesday while recession angst helped drive the 2-year yield sharply lower, a move that helped invert a key part of the yield curve to minus 12 basis points, a level not seen since 2007 another sign of increased recession risks. The market sees this as confirmation of an incoming recession which will pressurize bank margins while raising debt provisions 


What are we watching next?

The IMF cut its 2022 US GDP forecast

The reduction from the 2.9% forecast just one month ago to 2.3% came with a warning that a broad-based surge in inflation poses "systemic risks" to both the country and the global economy. The fund also lowered next year's growth estimate to 1% from 1.7% while predicting the unemployment rate will rise to 4.6% in 2023 and 5.2% in 2024.

Rate hikes from New Zeeland and South Korea

The RBNZ became the first to officially apply the economic brakes by boosting its key rate above neutral. New Zealand hiked by 50 bps to 2.5% and said it's appropriate to keep tightening conditions "at pace." South Korea meanwhile hiked by the same amount — its biggest-ever increase — to 2.25%, as expected.

Global airline stocks get relief, moving inversely to oil

American Air (AAL) saying revenue will rise 12% in Q2, compared to the PCP, while costs per seat will rise 12%. The stock jumped 10% to a month high, above its 30-day moving average, but guidance will be pulled apart when American Air reports July 21. Airlines stocks are moving inversely to the oil price while also catching bids from US/EU summer travel.  US carriers are likely to see sustained profit growth kick up for the first time since 2020. And we think guidance levels for 2022 may be rosy than expected given airlines biggest costs, oil, is down 20% from June. Other travel related stocks moved higher globally including United Air (UAL) up 8%, Boeing (BA) up 7% in the US. In APAC, Australia’s biggest carrier Qantas (QAN) rose 4.5%, Air New Zealand (AIZ) rose ~2% in NZ. Singapore Airlines rose modestly.

Other developments catching our attention:

Sri Lankan president flees to Maldives as street protests end clan dominance
Chile currency plunge, inflation rattle Latin America's copper king

What are we watching next?

US CPI expected to show an 8.8% year-on-year rise

Financial markets have traded nervously ahead of today’s report which is expected to show consumer inflation sped up to 8.8% last month, the fastest rise since 1981, while the core gauge may decelerate to 5.7%. Last month, the jump to 8.6% helped trigger a chain reaction starting with the FOMC’s aggressive 75 basis point rate hike leading to raised concerns about recession, thereby driving the dollar sharply higher and commodities sharply lower. An 8.8% print will support another bumper rate hike from the FOMC when they meet on July 27.

Earnings Watch
A preview of Q2 earnings releases over the next two weeks can be read on the trading platform or at

  • Wednesday 13 July: Fastenal, Delta Air Lines
  • Thursday 14 July: Fast Retailing, Ericsson, SEB, EQT, JPMorgan Chase, Morgan Stanley, Cintas
  • Friday 15 July: Investor, Sandvik, EMS-Chemie, UnitedHealth, Wells Fargo, Charles Schwab, BlackRock, Citigroup, Progressive, US Bancorp, PNC Financial Services

Economic calendar highlights for today (times GMT

0800 – IEA's monthly Oil Market Report
1330 – US June CPI
1400 – Bank of Canada Rate Decision
1430 – EIA's Weekly Inventory Report


Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app:

Apple Sportify Soundcloud Stitcher

Quarterly Outlook 2024 Q3

Sandcastle economics

01 / 05

  • Macro: Sandcastle economics

    Invest wisely in Q3 2024: Discover SaxoStrats' insights on navigating a stable yet fragile global economy.

    Read article
  • Bonds: What to do until inflation stabilises

    Discover strategies for managing bonds as US and European yields remain rangebound due to uncertain inflation and evolving monetary policies.

    Read article
  • Equities: Are we blowing bubbles again

    Explore key trends and opportunities in European equities and electrification theme as market dynamics echo 2021's rally.

    Read article
  • FX: Risk-on currencies to surge against havens

    Explore the outlook for USD, AUD, NZD, and EM carry trades as risk-on currencies are set to outperform in Q3 2024.

    Read article
  • Commodities: Energy and grains in focus as metals pause

    Energy and grains to shine as metals pause. Discover key trends and market drivers for commodities in Q3 2024.

    Read article

Saxo Capital Markets (Australia) Limited prepares and distributes information/research produced within the Saxo Bank Group for informational purposes only. In addition to the disclaimer below, if any general advice is provided, such advice does not take into account your individual objectives, financial situation or needs. You should consider the appropriateness of trading any financial instrument as trading can result in losses that exceed your initial investment. Please refer to our Analysis Disclaimer, and our Financial Services Guide and Product Disclosure Statement. All legal documentation and disclaimers can be found at

The Saxo Bank Group entities each provide execution-only service. Access and use of Saxo News & Research and any Saxo Bank Group website are subject to (i) the Terms of Use; (ii) the full Disclaimer; and (iii) the Risk Warning in addition (where relevant) to the terms governing the use of the website of a member of the Saxo Bank Group.

Saxo News & Research is provided for informational purposes, does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of our trading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. No Saxo Bank Group entity shall be liable for any losses that you may sustain as a result of any investment decision made in reliance on information on Saxo News & Research.

To the extent that any content is construed as investment research, such content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication.

None of the information contained here constitutes an offer to purchase or sell a financial instrument, or to make any investments.Saxo Capital Markets does not take into account your personal investment objectives or financial situation and makes no representation and assumes no liability as to the accuracy or completeness of the information nor for any loss arising from any investment made in reliance of this presentation. Any opinions made are subject to change and may be personal to the author. These may not necessarily reflect the opinion of Saxo Capital Markets or its affiliates.

Please read our disclaimers:
- Full Disclaimer (
- Analysis Disclaimer (
- Notification on Non-Independent Investment Research (

Saxo Capital Markets (Australia) Limited
Suite 1, Level 14, 9 Castlereagh St
Sydney NSW 2000

Contact Saxo

Select region


The Saxo trading platform has received numerous awards and recognition. For details of these awards and information on awards visit

Saxo Capital Markets (Australia) Limited ABN 32 110 128 286 AFSL 280372 (‘Saxo’ or ‘Saxo Capital Markets’) is a wholly owned subsidiary of Saxo Bank A/S, headquartered in Denmark. Please refer to our General Business Terms, Financial Services Guide, Product Disclosure Statement and Target Market Determination to consider whether acquiring or continuing to hold financial products is suitable for you, prior to opening an account and investing in a financial product.

Trading in financial instruments carries various risks, and is not suitable for all investors. Please seek expert advice, and always ensure that you fully understand these risks before trading. Saxo Capital Markets does not provide ‘personal’ financial product advice, any information available on this website is ‘general’ in nature and for informational purposes only. Saxo Capital Markets does not take into account an individual’s needs, objectives or financial situation. The Target Market Determination should assist you in determining whether any of the products or services we offer are likely to be consistent with your objectives, financial situation and needs.

Apple, iPad and iPhone are trademarks of Apple Inc., registered in the US and other countries. AppStore is a service mark of Apple Inc.

The information or the products and services referred to on this website may be accessed worldwide, however is only intended for distribution to and use by recipients located in countries where such use does not constitute a violation of applicable legislation or regulations. Products and Services offered on this website is not intended for residents of the United States and Japan.

Please click here to view our full disclaimer.