June kicked off with rallies in Treasuries and on Wall Street thanks diminished fears of a Fed rate hike and a debt default. USDIndex slumped. Stock markets across Asia moved higher while, the decline in yields helped support equities, especially big tech which had stumbled.
The US Senate has approved a fiscal deal between the White House and congressional Republicans, ending a weeks-long political stand-off that risked triggering an unprecedented debt default in the world’s largest economy.
Markets are looking for a pause from the Fed in June as debt drama is out of the way, the price data has weakened and there is a continued weakness in manufacturing. The repricing of Fed outlooks saw the probability of another 25 bp tightening on the 14th trimmed to 25% from 70% at the start of the week.
- FX – USDIndex closed at 103.58 from a peak of 104.50. EUR dipped to 1.0778, JPY extended losses to 138.60 and Cable spiked to above 1.2500 at 1.2543.
- Stocks – Hang Seng rose nearly 4%. The Nikkei closed 1.2% higher, the US100 is up by more than 1.29%, while the US500 was up 0.99% and the US30 0.47% higher. Nvidia another 5% up, Salesforce 4.69% down.
- Commodities – USOil have stabilised and backed up from recent lows amid an aversion of a default on the US’s liabilities. Currently it is at 70.92 from 66.85 yesterday.
- Gold – rallied to $1983.
- Cryptocurrencies – BTC recovered yesterday’s losses and is currently retesting a move above $27k.
Today – NFP day, with nonfarm payrolls projected rising 180k in May, though recent reports on jobless claims, ADP, and some of the PMIs suggest upside risks.
Biggest FX Mover @ (06:30 GMT) AUDJPY (+0.75%) spiked to 91.80. MAs currently flat, MACD histogram & signal line positive and rising, RSI 72 & flat.
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Andria Pichidi
Market Analyst
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