A lack of fresh catalysts sent the major financial assets all over the charts today.
Which headlines influenced your closely watched assets yesterday?
Here are the major themes you should know about!
Headlines:
- BusinessNZ Performance of Services Index dropped 3.6 pts to 43.0 in May; It reached “contraction levels greater than during the Global Financial Crisis of 2008/09“
- Rightmove: U.K.’s house prices stagnated (0.0%) in June after hitting record highs in May
- Japan’s core machinery orders for April: -2.9% m/m as expected after a 2.9% uptick in March
- ANZ-Indeed Australian Job Ads declined by 2.1% m/m in May after a 2.3% dip in April; “The labour market is cooling, but only gradually.“
- The PBOC held the medium-term lending facility rate at 2.5% as expected & withdrew a net ¥55B from the banking system
- China retail sales for May: 3.7% y/y (2.6% y/y forecast; 2.3% y/y previous); The unemployment rate for May 2024 held at 5.0% as expected
- China Industrial production for May: 5.6% y/y (6.3% y/y forecast; 6.7% y/y previous)
- Switzerland’s government lowered its forecast for 2024 inflation from 1.5% to 1.4% according to the State Secretariat for Economic Affair (SECO)
- Canadian Housing Starts for May: 264.5K (239.0K forecast; 241.1K previous) – CMHC
- Canadian securities international flow for April: C$41.16B (C$10.0B forecast; C$14.38B previous)
- NY Fed Manufacturing Index improved to -6 in June (10.0 forecast; -15.6 previous)
Broad Market Price Action:
Dollar Index, Gold, S&P 500, Oil, U.S. 10-yr Yield, Bitcoin Overlay Chart by TradingView
With few new market drivers, major assets mostly took cues from their individual catalysts.
Crude oil prices surged to the $80.00 level despite mixed economic data from China. This rise may be fueled by a recent rise in optimism for the upcoming summer driving season and speculation that OPEC+ might scale back on their plans to increase supply later this year.
Global equities also traded higher as political jitters calmed down in Europe and strength in the U.S. tech sector bumped up the S&P 500 and NASDAQ to new record highs.
Meanwhile, U.S. 10-year yields also inched higher to just under 4.30% while both spot gold and the U.S. dollar saw limited demand amidst a risk-friendly trading environment.
FX Market Behavior: U.S. Dollar vs. Majors
Overlay of USD vs. Major Currencies Chart by TradingView
The U.S. dollar saw mixed trading as markets anticipated this week’s key economic data releases and speeches from Federal Reserve officials.
The dollar fluctuated broadly early on and edged slightly higher before the U.S. trading session began. Later, the New York manufacturing PMI indicated a slower-than-expected contraction in June, which likely spurred some risk-taking.
Despite a generally risk-on trading atmosphere, the dollar didn’t fare well during the U.S. session. It lost significant ground against the euro as political tensions in Europe eased, although it managed to hold onto its gains against the yen, the New Zealand dollar, and the Australian dollar.
Upcoming Potential Catalysts on the Economic Calendar:
- Euro Area final CPI reports at 9:00 am GMT
- Euro Area ZEW economic sentiment at 9:00 am GMT
- Germany’s ZEW economic sentiment at 9:00 am GMT
- U.S. retail sales at 12:30 pm GMT
- U.S. industrial production at 1:15 pm GMT
- FOMC member Thomas Barkin to give a speech at 2:00 pm GMT
- BOJ’s meeting minutes at 11:50 pm GMT
- Japan’s trade balance at 11:50 pm GMT
We may see increased volatility as the Euro Area drops its final CPI figures and sees its latest ZEW economic sentiment reports.
An industrial production report and FOMC member Barkin’s speech may shake up the U.S. session trading today so y’all better keep close tabs on the headlines in case you see intraweek trend opportunities!
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