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US 10-year treasuries climbed as China lifted the visitor quarantine


US stocks fall to start the final week of 2022 trading. Tesla Inc. shares led to losses as a report of a plan to temporarily halt production at its China factory rekindled fears about demand risks. Besides, Apple Inc. touched the lowest since June 2021 amid a slump in big tech. Moreover, Southwest Airlines Co. led declines in airline stocks after cancelling flights, hobbled by a massive winter storm that battered the US.

The yield on 10-year Treasuries climbed 10 basis points to the highest since mid-November, as China moved to end the quarantine for inbound visitors.

The benchmark, the S&P 500 fell with 0.40% daily losses with trading about 20% below the 30-day average. Six of eleven sectors of the S&P500 stayed in the negative territory, and the Consumer Discretion section got the worst performance among all groups, recording 1.64% losses daily. Apart from this, the tech-heavy Nasdaq underperformed, dropping more than 1%. The Dow Jones Industrial Average surprisingly edged higher by 0.1%, and the MSCI world index moved lower by 0.1% for the day.

Main Pairs Movement

The US Dollar index edged lower on Tuesday, as trading volume is low with investors just coming back from the Christmas holidays. The DXY index hovered in a narrow range from 103.9 to 104.4 during the first trading day of the last week of this year.

The GBPUSD stayed on the defensive since the UK trading session, with China announcing earlier in the day that it will lift quarantine obligations for travellers from January 8 as part of its reopening efforts. The pair dropped around 0.78% in the period of European trading hours. In the meantime, the EURUSD was pricing with wild moves on Tuesday. The pair dropped hugely ahead of the US trading hour but managed to erase most losses and ended with a 0.03% daily gain.

The gold is benefiting from recent positive headlines surrounding Beijing. China’s easing of the Coronavirus-linked activity restrictions joined an upward revision to the 2021 GDP forecast to favour gold bulls amid a sluggish holiday season. The XAUUSD surged and once climbed above the $1830 mark in the early American trading session, then pullback and ended with a 0.86% daily gain on Tuesday.

Economic Data

CurrencyDataTime (GMT + 8)Forecast
USDPending Home Sales (Nov)23:00-0.8%