USD slips from highs (USDIndex 103.80), Stocks closed flat (NASDAQ & DJIA -0.15%) Yields tanked (-4%) after Powell said FED were “strongly committed” to the inflation fight and that recession was “certainly possible”. Asian shares mixed (Hang Seng +1.64%, Nikkei +0.8%, Kospi -0.7%) Oil slumped another -2% and Gold & BTC slide sideways. Biden announced tax reprieve on gasoline, but is under increasing political pressure, Johnson faces two more by-election defeats today & national rail strikes on-going, (6th Anniversary of Brexit vote) and Scholz fears gas line shutdown and unable to speak with Putin. USDJPY cooled from new 24-year high as JPY outperformed in Asian session.
- USDIndex tested 103.60 yesterday before recovering to 104.00 now.
- Equities – USA500 closed -4.9 (3759), US500FUTS lower at 3756 now.
- Yields 10-year yield higher, closed down -479% at 3.156% , trades at 3.18% now.
- Oil & Gold had mixed sessions – USOil slumped 2.2% to trade under $102 yesterday following Biden & Powell, back to $104.80 now. Gold spiked to $1845 and trades at $1834 now on weaker Yields and USD.
- Bitcoin continues to pivot around $20K, trades at $20.5K now.
- FX markets – EURUSD tested 106.00 yesterday back to 1.0560, USDJPY cooled from 136.71 yesterday to test 135.00 earlier & back to 135.83 now. Cable trades down to 1.2230 now from rally to 1.2330 yesterday .
Overnight – Japanese Manu PMI – miss (52.7 vs 53.5) UK Public sector borrowing hit £14bn last month, the third-highest May since 1993, and worse than the expected £11.6bn.
Today – EZ, UK & US Flash PMIs, US Initial Claims, Policy Announcements from Norges Bank, CBRT & Banxico, US Bank Stress Test Results, Fed’s Chair Powell Speaks at the House Finance Committee.
Biggest FX Mover @ (06:30 GMT) AUDJPY (-0.68%). JPY out performs today with safe haven bid. Rallied from 93.20 earlier to 93.70, next resistance the significant 94.00. MAs aligning higher, MACD histogram negative & still turning lower, RSI 42.45, and rising, H1 ATR 0.278, Daily ATR 1.49.
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Stuart Cowell
Head Market Analyst
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