MARKET REPORT

Review:
– gold, stocks, and bonds bid as rate-cut hopes inched higher.

– The market is now pricing in two rate-cuts in 2024 and three more cuts in 2025…

– Copper 2yr High, Nat Gas 4-month High, Cocoa +5+%, Silver +3.3%

– DAX closes 4-week high

– Wall Street extended its gains for the third consecutive session on Monday, driven by positive sentiment following softer labor data and growing expectations of an impending interest rate cut by the Federal Reserve. The S&P 500 gained 1%, the Nasdaq rose 1.2% and the Dow added 176 points

– Hamas accepts ceasefire proposal, Israel not in agreement, to continue with Rafah op

– Mixed Fed speak

– China Caixin Services PMI in line

– FAA opens up new BA investigation.

DOLLAR DX UNCH: 104.98            UNCH (105.06 – 104.75) Off Highs
– AUD up: 66.25                               +0.25% (66.11 – 66.38) HIGHS
– EUR UNCH: 92.83                         UNCH (92.93 – 92.65) Off Lows
– GBP UNCH: 125.63                       UNCH (125.42 – 125.94) MID
– JPY UP: 153.91                               +0.63% (153.98 – 153.42) HIGHS

GOLD up: $2334                                             +1.1% ($2317 – $2340) Off Highs
DOW/ES/ND up/up/up:                                38993 +0.4%, 5206 +1.0%, 18186 +1.0%
CRYPTO: BTC/ETH down/down:                  -0.6% 63305, -1.8% 3077
CRUDE up: $78.68                                          +0.75% ($79.08 – $78.00) MID

Upcoming:

Week Ahead: RBA, BoE, BoJ SOO, ECB Minutes, UK GDP and Canada jobs

Speakers:

EARNINGS:

 [TUES] TDG, DIS, ANET, MCK, OXY; [WED] UBER, EMR, SHOP, ARM, ABNB; [THURS] CEG

MAJORS:

DX:
Flat on Monday with DXY hitting a low of 104.86 in the US morning but it pared from lows amidst mixed Fed speak and geopolitical updates. On the former, Barkin (voter) stressed the job is not done yet. Williams acknowledged that job growth is moderating and that he is looking at the totality of economic data. Meanwhile, Barkin said he still feels like the weight of risks is moving towards inflation. He also said that GDP growth still seems strong and that there is now focused attention on the job market. On the Middle East, Hamas announced they have accepted the latest ceasefire proposal but Israel sees the deal as unacceptable, but it has sent some negotiators to Cairo. DXY reclaimed 105.00 and sits just above it heading into APAC trade.

DOLLAR DX UNCH: 104.98            UNCH (105.06 – 104.75) Off Highs

No call

AUD:
Aussie enjoyed the upside in US equities outperforming.

AUD up: 66.25                                 +0.25% (66.11 – 66.38) HIGHS

No call

GBP
GBP saw mild gains but UK players were away for the Bank Holiday.

GBP UNCH: 125.63                         UNCH (125.42 – 125.94) MID

No call

EUR
Out of Europe, ECB’s Lane said that the April slowdown in services inflation marks significant progress and that confidence on inflation is improving, he also noted that exaggerating the impact of ECB and Fed divergence is not necessary and Fed decisions have limited impact in the euro area. ECB’s Simkus meanwhile said last week’s GDP and inflation data were as expected and has not changed his thinking, noting the ECB can afford to reduce restrictions. Vujic said that incoming so far is consistent with projections and he expects a loosening of the policy stance but it will still be restrictive. On data, the Final EU HCOB services PMI was revised up to 53.3 from 52.9 with the composite rising to 51.7 from 51.4, despite expectations for both to be left unchanged.

EUR UNCH: 92.83                            UNCH (92.93 – 92.65) Off Lows

No call

YEN:
USD/JPY finding resistance at 154.00, failing to breach above the level albeit USD/JPY still remains well beneath the 160.00 peak seen last week before the dovish FOMC and suspected Japanese intervention.

JPY UP: 153.91                                 +0.63% (153.98 – 153.42) HIGHS

No call

GOLD & SILVER:

Capitalize on weak United States labor market and Services PMI that raises concerns over the economic strength and prompt expectations for Federal Reserve (Fed) cutting interest rates from the September meeting.

GOLD up: $2334                                             +1.1% ($2317 – $2340) Off Highs

No call

EQUITIES:

US INDEXES:
– SPX +1.03% 5,181
– NDX +1.13% 18,094
– DJI +0.46% 38,852
– RUT +1.23% 2,061

EUR INDEXES:
– DAX: +0.95% 18,171.91
– CAC: +0.49% 7,996.64
– ES50: +0.71% 4,956.65
– IBEX 35: +0.58% 10,917.50

SECTORS (S to W): Technology +1.48%, Communication Services +1.39%, Financials +1.17%, Consumer Discretionary +1.06%, Industrials +1%, Energy +0.82%, Materials +0.63%, Utilities +0.45%, Health +0.44%, Consumer Staples +0.08%, Real Estate -0.02%

STOCKS
Microsoft  +1.7%: Reportedly preparing a new AI model to compete with Google (GOOG) and Open AI, according to The Information.
Tesla +2%: Launches another round of layoffs across several departments including software, service, and engineering, according to Electrek.
Boeing -0.8%: FAA opens new investigation into Boeing (BA) related to the its inspections of its 787 Dreamliner and whether company employees falsified records, according to WSJ.
Intel +0.5%: Will partner with 14 Japanese companies to develop technology to automate “back-end” chipmaking processes like packaging, according to Nikkei.
Apple -0.9%: Berkshire Hathaway decreased its substantial Apple stake in Q1, now valued at USD 135.4bln, a 13% reduction.

OIL:
WTI (M4) SETTLES USD 0.37 HIGHER AT 78.48/BBL; BRENT (N4) SETTLES USD 0.37 HIGHER AT 83.33/BBL

Oil prices were choppy on Monday after initial gains were pared on ceasefire headlines. WTI and Brent peaked at USD 79.09/bbl and 83.83/bbl, respectively, in the European morning, chopping sideways until the NY afternoon where some kneejerk downside was seen on headlines that Hamas had agreed to the Egyptian and Qatari ceasefire agreement, hitting lows of USD 77.91/bbl and 82.77/bbl, respectively. Some of the downside was then faded into settlement with reports from the Israeli side coming out and downplaying the Hamas statement, saying the deal had been adjusted against Israel’s wanted format and that they are still planning for a Rafah invasion. Nonetheless, the crude benchmarks are lower than where they were and Reuters reported later, citing an official briefed on talks, that there were no changes to the major elements, which is perhaps an indication that the difference is narrowing. Oil report courtesy of Newsquark

CRUDE up: $78.68                                          +0.75% ($79.08 – $78.00) MID


BOND YIELDS:

US 1-MO 5.37 +0.003
US 6-MO 5.371 +0.005
US 1-YR 5.142 +0.005
US 5-YR 4.487 +0.005
US 10-YR 4.487 -0.013
US 30-YR 4.637 -0.024

2YR/10YR -0.35

CRYPTO
– RobinHood receives ‘Wells’ notice from the SEC on Saturday (an enforcement action)

– The crypto sector attracted US$1.02 billion in venture capital funding in April 2024 across 161 investment rounds
– second consecutive month funding surpassed the billion-dollar threshold
–  brings the amount invested in crypto ventures thus far in 2024 to US$3.67 billion.
– Blockchain infrastructure companies alone amassed over US$1.7 billion this year.
– The Industry recorded over US$9 billion throughout last year.

CRYPTO: BTC/ETH down/down:                  -0.6% 63305, -1.8% 3077

No Call

KEEP DOING WHATS WORKING
STOP WHAT ISNT.

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

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