MARKET REPORT
Day in Review:
Today:
– Marine Le Pen’s National Rally’s victory in the first round of France’s parliamentary election, as predicted
– GE CPI report cooler than expected, EU harmonized also lower than exp
– Yield on German 10-year Bunds rose to the 2.57% mark, its highest in over two weeks as political uncertainty in France continued to add volatility to the European bond market
– Euro Bourses close higher
– Yen hits 37.5yr LOW
– US S&P Global Manufacturing PMI Revised Slightly Lower to 51.6 from 51.7
– US ISM Manufacturing PMI declined to 48.5 in June 2024 from 48.7 in May, below forecasts of 49.1
– US Construction spending fell by 0.1% month-over-month to a seasonally adjusted annual rate of $2,140 billion in May 2024, following a revised 0.3% increase in the prior month and defying market forecasts of a 0.1% rise.
– Lumber hits 14 month low
– Tesla surges +6%
– Roaring Kitty sued
– Redbox -37%, files for Ch11
– SCOTUS gives Trump a partial win
– BA to buy SPR in an all-stock deal
– Cotton +8.5%, Corn -5.19%, Nat Gas -4.37%
– Equities mixed, Tech Leads (AGAIN), Treasuries down, Crude UP, Dollar flat/up
DOLLAR DX UNCH: 105.50 UNCH (105.11 – 105.65) MID
– AUD down: 66.56 -0.14% (66.87 – 66.46) MID
– EUR down: 93.09 -0.24% (92.77 – 93.25) Off HIGHS
– GBP UNCH: 1.2648 UNCH (126.96 – 126.34) Off LOWS
– JPY up: 161.48 +0.4% (160.87 – 161.71) Off HIGHS
GOLD UNCH: $2341 UNCH% (2329 – 2349) MID
DOW/ES/ND unch/up small/UP: 39493 +0.06%, 5532 +0.19%, 20042 +0.58%
CRYPTO: BTC/ETH up: 63084 +1.83%, 3457 +1.34%
CRUDE UP: $83.51 +2.4% (81.73 – 83.59) HIGHS
Upcoming:
– RBA MINUTES
– EZ Flash HICP
– Canadian Manufacturing PMI
– US JOLTS
Speakers:
Fed: Powell
ECB: Lagarde, Schnabel, de Guindos & Elderson
BCB: Neto
EARNINGS:
MAJORS:
DX:
The Dollar was ultimately bid with DXY finding resistance at 106.00.
The Dollar had started the session on the back foot with upside in Euro keeping pressure on the buck but with UST yields rising throughout the session, the buck managed to claw back the earlier losses. Weakness in the Yen was also supportive.
The US highlight was the ISM Manufacturing PMI data, which came in softer than expected with easing prices and employment metrics and although new orders improved, it remained in contractionary territory.
DOLLAR DX UNCH: 105.50 UNCH (105.11 – 105.65) MID
EUR:
The Euro was ultimately flat on Monday but initial upside was seen in response to the 1st round of French Elections which saw the National Rally party make significant gains but the odds of another hung parliament have likely increased, which was seen as the more market-friendly outcome in the short term.
The PMI final Manufacturing PMI data saw a slight revision higher, with upside revisions seen in Germany, France, and Italy.
German inflation data also came in on the softer side of expectations.
EUR/USD peaked at 1.0776 but as the Dollar staged a comeback the Euro hit a low of 1.0724.
Note, there were several ECB speakers ahead of SINTRA too, Nagel said the German economy is regaining its footing, while Simkus said two more rate cuts for 2024 are possible if data comes in as expected, but noted that the case for a July rate cut has gone. Wunsch said that market pricing on rates looks reasonable, and while a July cut is an option in theory, in practice the ECB must be cautious.
EUR down: 93.09 -0.24% (92.77 – 93.25) Off HIGHS
GBP
GBP was flat vs the Dollar with UK players keeping eyes on the UK election on 4th July
GBP UNCH: 1.2648 UNCH (126.96 – 126.34) Off LOWS
AUD:
There was little reaction in response to the Caixin China PMIs in the Antipodean currencies with AUD/USD trading either side of 0.6650 throughout the session with technicians eyeing 0.6700 to the upside as potential resistance.
AUD down: 66.56 -0.14% (66.87 – 66.46) MID
YEN:
The Yen continued its decline with firmer US yields adding to the Yen woes.
USD/JPY peaked at 161.73, another multi-decade high with traders cognizant of potential Yen intervention but analysts suggest the new line in the sand is around 165.00.
Focus was on the Japanese Tankan survey, which saw its large manufacturers’ index rise to 13.0 in Q2 from 11.0 in Q1 (analysts had expected 12.0).
Manufacturers’ sentiment improved as the weak yen boosted earnings from overseas sales.
Large manufacturers output prices rose to 29.0 from 25.0; large non-manufacturers output price index rose to 29.0 from 27.0.
Large non-manufacturers business conditions fell to 33.0 from 34.0.
Across all industries and firm sizes, business conditions were steady at 12.0.
Capital Economics noted that price pressures rose despite unchanged capacity utilisation.
Employment conditions improved slightly, but job openings continued to decline.
The yen’s weakening drove up output prices, prompting firms to revise their currency forecasts.
CapEco added that the Tankan supports expectations for the BoJ to hike rates to 0.3% ahead.
JPY up: 161.48 +0.4% (160.87 – 161.71) Off HIGHS
GOLD/SILVER
Nothing to see here…
GOLD UNCH: $2341 UNCH% (2329 – 2349) MID
EQUITIES:
US:
– SPX +0.27% 5,475
– NDX +0.66% 19,812
– DJI +0.13% 39,170
– RUT -0.86% 2,030
EURO:
– DAX +0.47% 18,322
– CAC +1.09% 7,561
– FTSE +0.03% 8,167
– ES 50 +0.74% 4,930
SECTORS (S to W): Technology +1.30%, Consumer Discretionary +0.73%, Financials +0.22%, Communication Services +0.10%, Energy +0.02%, Health -0.56%, Consumer Staples -0.67%, Utilities -0.69%, Real Estate -0.99%, Industrials -1.10%, Materials -1.55%
STOCKS:
– Spirit AeroSystems (-3.2%): Boeing (+2.54%) agreed to acquire SPR in a USD 4.7bln deal, paying USD 37.25/shr in an all-stock deal.
Nvidia (+0.62%): French anti-trust regulators are reportedly preparing to charge Nvidia (NVDA) over alleged anti-competitive practices, via Reuters citing sources
– Tesla (+6.05%): Ahead of releasing its production and delivery numbers for Q2 24 tomorrow, (exp. 438,019).
– Apple (+2.91%): JPMorgan said May data continued to show an improving trajectory for iPhone shipments in China, supported by the recovery in the broader China smartphone market.
– Amazon (+2.04%): To invest more in data-centre infrastructure than retail warehouses, and plans to spend over USD 100bln in the next decade on AI and cloud computing, WSJ reported.
– Meta Platforms (+0.091%): EU antitrust regulators charging the company for failing to comply with landmark tech rules
– Chewy (-6.61%): Keith Gill, or Roaring Kitty, announced a 6.6% state in the stock, according to a filing.
– US Banks (KBWB, JPM, GS, MS, WFC, C, BAC etc.): Announced plans on Friday to increase dividend payouts after passing the Fed’s annual stress tests, details available within the research suite or headline feed.
– Paramount (-2.41%) reportedly hunting for a streaming partner and could kick off a wave of deals, via CNBC, Warner Bros. Discovery has interest in merging Max and Paramount+ as a joint venture, according to CNBC citing sources
OIL:
Oil’s move is dragging wholesale gasoline prices higher and pump prices are starting to turn as the lags start to hit the supply chain…
CRUDE UP: $83.51 +2.4% (81.73 – 83.59) HIGHS
BOND YIELDS:
Bond data unavailable today
US 1-MO 5.
US 6-MO 5.
US 1-YR 5.
US 5-YR 4.
US 10-YR 4.
US 30-YR 4.
2YR/10YR -0.
CRYPTO
Crypto rallied strongly over the weekend and held the gains today, erasing most of the post-Mt.Gox plunge losses from last week.
CRYPTO: BTC/ETH up: 63084 +1.83%, 3457 +1.34%
KEEP DOING WHATS WORKING
STOP WHAT ISNT.
Best of luck out there. Let the market come to you
Joke of the Day:
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