Insurers are struggling with a lack of data on electric vehicle (EV) batteries, leading to the scrapping of EVs after minor accidents, which is undermining EV adoption as vehicle insurance is mandatory. The absence of affordable repair solutions and post-accident diagnostics for EV batteries is also a concern compared to the widely established workshops for ICE vehicles, which require less electronic expertise and more mechanical know how. Insurers face challenges in assessing and repairing damaged battery packs, resulting in higher premiums and longer repair times for EV-related claims compared to fossil-fuel vehicles. It does not help that the lithium used in batteries is limited, volatile, and flammable, making it harder and longer to repair.
EQUITY
Asian shares declined on Wednesday due to a slowdown in China's service activity and anticipation of key events in the United States. Market sentiment was subdued following the Independence Day holiday in the US, with futures for the S&P 500 and Nasdaq experiencing slight dips. Traders are now focused on the release of Federal Reserve minutes and the upcoming US jobs report, with expectations of a rate hike in July.
GOLD
Gold prices remained range-bound as investors awaited the release of the Federal Reserve's meeting minutes for clues, but four continuous session gains gave a positive price outlook. The minutes were expected to reveal discussions about future rate hikes, potentially causing short-term softness in gold prices. However, medium- to long-term investors were still expected to buy any price dips as gold remained capable of achieving new highs by the end of the year.
OIL
Oil prices eased after a strong session yesterday as concerns over a global economic slowdown outweighed expectations of tighter supply due to output cuts by Saudi Arabia and Russia. Lingering worries about the global economy, interest rate hikes, and weak economic indicators in China and Europe continued to exert pressure on oil prices.
CURRENCY
The US dollar held steady as traders awaited the Federal Reserve's meeting minutes and labour data. The euro slightly rose, while the dollar-yen rate hovered below the level that triggered intervention by Japanese authorities last year. The Australian dollar remained flat after initially dipping when the Reserve Bank of Australia beat expectations by keeping interest rates unchanged, but later recovered as traders anticipated future rate hikes and benefited from a stronger Chinese yuan.
