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Tuesday, 5 July 2022

Commodity prices are falling back — but is it enough to tame inflation?

Commodity prices are beginning to cool — and it’s stirring hope that inflation has peaked: Investors who piled into assets like fuel, corn and wheat to hedge against rising inflation have been making their exits, an indicator that a major contributor to wave of global inflation has begun to cool, the Wall Street Journal reports. “Moderating commodity prices are clear evidence that inflation is cooling,” one analyst said, pointing to the commodities that saw their prices soar during 2Q 2022 before ending the quarter at much lower levels. Natural gas prices had climbed more than 60% before ending the quarter 3.9% lower, Brent crude slipped from highs above USD 120 a barrel to end around USD 106, and grains ended the quarter cheaper too.

Russia and Iran are in a race to the bottom on crude prices: Iran is being pushed to slash its already cheap crude in a bid to compete with Russia, which in May became Beijing’s biggest oil supplier. With both Tehran and Moscow slapped with Western sanctions that significantly curtail their potential export markets, “the only competition between Iranian and Russian barrels may end up being in China, which would work entirely to Beijing’s advantage,” one analyst said. (Bloomberg)


  • Turkey’s inflation rose to 78.6% y-o-y in June, up from 73.5% in May. While staggering, the figure is lower than analysts’ median forecast of nearly 80% in a Bloomberg survey. (Bloomberg)
  • More rate hikes, this time from Israel: The Israeli central bank has delivered its third consecutive rate hike and the biggest in more than a decade, increasing interest rates by 50 basis points to 1.25% in a bid to tamp down inflation. (Bloomberg)
  • Germany is facing some serious sanctions blowback: Germany is facing its worst economic crisis in decades, recording a monthly trade deficit for the first time in over three decades as the country struggles with surging energy prices and trade disruptions. Chancellor Olaf Scholz said that the country is being presented with an “historic challenge” and warned that “the crisis won’t pass in a few months.” (FT)




-3.6% (YTD: -27.3%)



Buy 18.81

Sell 18.89



Buy 18.83

Sell 18.89


Interest rates CBE

11.25% deposit

12.25% lending




-0.9% (YTD: +0.7%)




-0.4% (YTD: +9.6%)




-1.4% (YTD: -1.2%)


S&P 500


+1.1% (YTD: -19.7%)


FTSE 100


+0.9% (YTD: -2.1%)


Euro Stoxx 50


+0.1% (YTD: -19.7%)


Brent crude

USD 113.50



Natural gas (Nymex)

USD 5.88




USD 1,808.30




USD 19,897

+3.3% (YTD: -57.2%)


The EGX30 fell 3.6% yesterday on turnover of EGP 640 mn (22.5% below the 90-day average). Foreign investors were net sellers. The index is down 27.3% YTD.

In the red: Ibnsina Pharma (-15.4%), Credit Agricole (-10.7%) and MM Group (-10.3%).

It’s another mixed open for Asian markets this morning: Shares fell in China despite rumors that the US might be about to ease some of its trade tariffs on Chinese products, while other bourses in the region rose. Stock futures point to European shares rising when markets open, as will shares on Wall Street, where financial markets are reopening after a three-day holiday.

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