MARKET REPORT

Review:

– Hot M/M US PPI, but not as bad as first looks

– Powell ““it’s a possibility – but I dont think it will be the case – that the next action we take will be a rate hike… most likely we will stay the course….”

2024 now pricing in almost two cuts and 2025 now pricing in just over three cuts

Meme stocks: Crazy day no2

– BoE’s Pill talks up possibility of rate cuts

DOLLAR DX down: 104.86             -0.23% (105.26 – 104.84) LOWS
– AUD up: 66.25                               +0.27% (65.83 – 66.28) HIGHS
– EUR down: 92.41                          -0.27% (92.83 – 92.35) LOWS
– GBP up: 125.10                             +0.25% (125.10 – 125.92) HIGHS
– JPY up: 156.43                               +0.15% (156.27 – 156.67) MID

GOLD up: $2362                                             +0.8% ($2341 – $2365) HIGHS
DOW/ES/ND up:                                             39677 +0.3%, 5268 +0.4%, 18410 +0.6%
CRYPTO: BTC/ETH down:                              -2.5% 61576, -2% 2894
CRUDE down: $78.15                                    -1.25% ($79.28 – $77.76) Off Lows

Upcoming:

Australian Wage Price Index
EZ Employment

US CPI, Retail Sales

Speakers:

Fed’s Kashkari

EARNINGS:

Merck, RWE, Thyssenkrupp, Allianz, Commerzbank, JD Sports, Compass, Ubisoft, Telecom Italia, Cisco Systems.

MAJORS:

DX:
The Dollar was lower on Tuesday, after seeing two-way action post-US PPI, as the initial hawkish reaction quickly pared, highlighted by the Dollar Index hitting a high of 105.470 before a low of 104.950. Briefly recapping the data, headline and core M/M metrics were hotter-than-expected, printing 0.5% (exp. 0.3%, prev. -0.1%) and 0.5% (exp. 0.2%, prev. -0.1%), respectively, with both outside of the upper bound of the forecast range. Headline Y/Y was in line with expectations at 2.2%, with the previous revised lower to 1.8%, with Core unchanged at 2.4%, as forecasted. Nonetheless, analysts noted that details under the bonnet were more encouraging for PCE than the headline suggests, along with downward revisions to prior data. Of course, this comes ahead of US CPI on Wednesday, where both reports will be used to help gauge expectations for the Fed’s preferred gauge of inflation, Core PCE, due at the end of the month. Elsewhere, Fed Chair Powell said confidence in inflation moving back down is lower than it was before, and on the PPI reading, said it was actually quite mixed.

DOLLAR DX down: 104.86             -0.23% (105.26 – 104.84) LOWS

No call

AUD EUR GBP:
EUR, GBP, AUD all saw slight gains vs. the Greenback, albeit to varying degrees on account of the aforementioned Dollar’s movement, as opposed to much currency specific. Despite this, the Pound saw some of its own risk events in the UK morning, as Cable was choppy on jobs data which saw an uptick in the unemployment rate and hotter-than-expected wage metrics. Thereafter, it was dragged lower by comments from BoE’s Pill who continued to talk up the possibility of rate cuts. These remarks saw Cable print a trough at 1.2510 before being hitting later peaks of 1.2592. For the EUR, German ZEW Economic Sentiment was better than forecasted in May, while ECB’s Wunsch said the first 50bps of total cuts are close to a no-brainer, via Handelsblatt; should proceed gradually and not commit to a second move in July. EUR/USD traded between 1.0768-1.0825. The Aussie was unreactive to the inline Australian budget. AUD/USD and NZD/USD were between 0.6580-0.6627 and 0.5996-0.6038, respectively, ahead of Aussie employment figures on Thursday.

– AUD up: 66.25                               +0.27% (65.83 – 66.28) HIGHS
– EUR down: 92.41                          -0.27% (92.83 – 92.35) LOWS
– GBP up: 125.10                             +0.25% (125.10 – 125.92) HIGHS

No call

YEN:
JPY was the G10 underperformer and was flat against the Buck, seeing a high of 156.75, with not much in the way of resistance ahead of 157.00. For the record, Japanese Finance Minister Suzuki was out jawboning after USD/JPY crossed back above 156.00.

JPY up: 156.43                                 +0.15% (156.27 – 156.67) MID

No call

EQUITIES:

US INDEXES:
– SPX +0.48% 5,246
– NDX +0.68% 18,322
– DJIA +0.32% 39,557
– RUT +1.14% 2,085

EUR INDEXES:
– DAX -0.10% 18,723
– FTSE: +0.16% 8,428
– CAC: +0.20% 8,225
– ES50: -0.01% 5,078
– IBEX 35: +0.78% 11,239

SECTORS (S to W): Technology +0.93%, Real Estate +0.69%, Financials +0.48%, Communication Services +0.47%, Consumer Discretionary +0.44%, Health +0.43%, Utilities +0.21%, Materials +0.08%, Industrials unch., Energy -0.15%, Consumer Staples -0.22%

STOCKS
AMC +33%, GameStop +60.5% continue to surge after extensive gains on Monday.
Paramount -5%: Sony (SONY) is reportedly rethinking Paramount bid, according to CNBC.
Oracle +4%: Musk’s xAI reportedly nears USD 10bln deal to rent Oracle’s AI servers, according to The Information.
Sony +6.5%: Strong results highlighted by net sales and net income smashing expectations.
Alibaba -6.5%: Reported an 86% drop in profits Y/Y.

OIL:
WTI (N4) SETTLED USD 0.95 LOWER AT 77.65/BBL; BRENT (N4) SETTLED USD 0.98 LOWER AT 82.38/BBL

The crude complex was lower on Tuesday, as US inflation data and OPEC sources weighed. WTI and Brent hit session lows of USD 77.26/bbl and 82.10/bbl, respectively, after the hotter-than-expected headline and core M/M PPI metrics, but oil was already heading that lower after Bloomberg source reports noted OPEC+ has reopened fraught debate on members’ oil capacity; UAE, Kazakhstan, Iraq, Kuwait and Algeria are among countries whose potential to pump more next year is under scrutiny. However, through the US afternoon oil was choppy, albeit settling around lows. Elsewhere on the day, OPEC MOMR said demand growth for 2024 and 2025 remain broadly unchanged vs prior month at 2.2mln BPD and 1.8mln BPD, respectively. Looking ahead, private inventory data is after-hours, ahead of the weekly EIA data on Wednesday, where the formers current expectations are: Crude -0.5mln, Distillate 0.8mln, Gasoline 0.5mln. Oil report courtesy of newsquark

CRUDE down: $78.15                                    -1.25% ($79.28 – $77.76) Off Lows

BOND YIELDS:

US 1-MO 5.362 -0.003
US 6-MO 5.377 -0.005
US 1-YR 5.176 -0.006
US 5-YR 4.46 -0.039
US 10-YR 4.445 -0.036
US 30-YR 4.592 -0.030

2YR/10YR -0.38

CRYPTO

– The U.S. state of Wisconsin purchased 94,562 shares of BlackRock’s iShares Bitcoin Trust

– Galaxy’s Novogratz see’s BTC stuck in 55-75k range

– Wells Fargo announces investments in BTC ETF’s

– Biden shuts down crypto miner in Wyoming. But more remain.

CRYPTO: BTC/ETH down:                              -2.5% 61576, -2% 2894

KEEP DOING WHATS WORKING
STOP WHAT ISNT.

Best of luck out there. Let the market come to you

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