MARKET REPORT

Marketplace of Sparta

Day in Review:

Today:

US 1-Year Inflation Expectations Back to 3%
– US consumer inflation expectations for the year ahead declined for a second consecutive month to 3% in June 2024 from 3.2% in May

US Consumer Credit Growth Beats Expectations in May
                – Total consumer credit in the US rose by $11.35 billion in May 2024, up from a $6.4 billion rise in April, and surpassing market expectations of a $10 billion increase. This brings the seasonally adjusted annual growth rate of consumer credit to 2.7%.

– NY Fed SCE sees 1yr & 5yr move lower, but 3yr higher

– Mortgage rates back on the rise

– United Airlines flight loses wheel

– French election saw a surprise win for left-wing NFP, albeit not enough for majority

– PBoC refrains from more gold buys

– Steel hits 7-year low

– Israel IR rate UNCH at 4.5%

– Apple is 44.5% of Berkshire Hathaway’s portfolio

– Steel down 2.79%, Platinum -2.77%, UK Gas -2.98%. Corn Wheat down 7%, Oats 6%. OJ up 1.33% LEWIS!

– DOLLAR UP SMALL, GOLD DOWN, EQUITIES UP SMALL, CRUDE DOWN, CRYPTO MIXED

DOLLAR DX UP: 104.68                  +0.12% (104.70 – 104.475) HIGHS
– AUD down: 67.37                          -0.17% (67.62 – 67.33) LOWS
– JPY UNCH 160.80                          UNCH (160.27 – 161.10) MID
– EUR up: 92.37                                 +0.16% (92.44 – 92.18) MID
– GBP UNCH: 1.2807                       UNCH (128.02 – 128.45) LOWS
– JPY UNCH 160.80                          UNCH (160.27 – 161.10) MID

GOLD down: $2366                                         -1.31% (2397 – 2358) LOWS
DOW/ES/ND UNCH/UNCH/up:                   39674 UNCH, 5628 UNCH, 20684 +0.31%
CRYPTO: BTC/ETH UNCH:                              56414 UNCH, 3011 +2.0%
CRUDE down: $82.22                                     -1.13% (83.18 – 82.12) LOWS

Coming up:

– BoJ Bond Meeting (1/2)

Speakers:

– ECB: Cipollone
– Fed: POWELL, Barr, Bowman

EARNINGS:
MAJORS:

DX:
The Dollar was ultimately flat on Monday with a lack of Fed speakers and tier 1 data seeing the DXY trade either side of 105.00, but more as a function of the Euro. The US highlight saw the NY Fed Survey of Consumer Expectations show that consumers 1yr ahead inflation expectations eased to 3.0% from 3.2% in April, although the 3yr ahead ticked up to 2.9% from 2.8% and the 5yr ahead eased to 2.8% from 3.0%.

DOLLAR DX UP: 104.68                  +0.12% (104.70 – 104.475) HIGHS

EUR:
EUR/USD saw two-way price action in response to the French elections, the results saw the cross gap lower to find support at 1.08.

The 2nd round of the French Election gave a different result to what the polls heading into the weekend had predicted. The left-wing NFP came out on top with Macron’s centrist ENS in second and the right-wing RN in third. Nonetheless, no party hit the 289-seat threshold for a majority and France enter another period of hung parliament.

After gapping lower, EUR/USD gradually pared throughout the session. Citi suggests that political gridlock in France is good for EUR/USD upside but notes that the fund manager community remains short EUR/USD, and a further squeeze remains a realistic possibility.

EUR up: 92.37                                   +0.16% (92.44 – 92.18) MID

GBP

GBP UNCH: 1.2807                          UNCH (128.02 – 128.45) LOWS

AUD:

AUD down: 67.37                            -0.17% (67.62 – 67.33) LOWS

YEN:
USD/JPY was also ultimately flat trading between 160.27 and 161.11. The cross moved lower in response to Japanese wage data but then gradually pared throughout the EU and US session.

Wages data overnight saw regular pay rise 2.5% Y/Y, the fastest pace since 1993, however, when adjusted for inflation, wages fell for the 26th straight month. Real earnings fell 1.4% in May vs the revised down -1.2% in April. Analysts at Rabobank highlight that “The 26th consecutive drop in real wages in Japan points to a continuation of weak consumer spending and poor consumer confidence which suggests that it will be difficult for the BoJ to tighten policy settings”. The hot headline data could bolster July rate hike expectations with Citi noting that “Everything points to a very big risk of a rate hike on 31st July”.

Attention turns to the BoJ bond meeting taking place overnight, where the BoJ will discuss its bond-tapering plans. Sources articles will be of note on how the meeting went, while data ahead sees Japan CPI on 19th July and Tokyo CPI on 26th July, ahead of the 31st BoJ meeting.

JPY UNCH 160.80                             UNCH (160.27 – 161.10) MID

US TREASURIES

GOLD/SILVER
Gold sold off throughout the session with weakness overnight and this morning driven by PBoC holding off on gold purchases for the 2nd consecutive month.

A ceasefire agreement this week could also be driving price action, but on Friday negotiators said that gaps remain while on Monday Hamas said the latest Israeli evacuation order and military escalation could return negotiations back to square zero.

Attention turns to Fed Chair Powell and US CPI data this week. XAU/USD hit a low of USD 2,351/oz, wiping out all the post-NFP gains on Friday.

GOLD down: $2366                                         -1.31% (2397 – 2358) LOWS

EQUITIES:

OIL:
Crude prices tumbled back towards $82 (WTI) from $84.50 highs late Friday

CRUDE down: $82.22                                     -1.13% (83.18 – 82.12) LOWS

BOND YIELDS:

Data Unavail
US 1-MO
US 6-MO
US 1-YR
US 5-YR
US 10-YR
US 30-YR

2YR/10YR -0.35

CRYPTO
– dumping overnight back near $54,000, then panic bid all the way above $58,000 into the European session and then dumping back to $55k during the US session

CRYPTO: BTC/ETH UNCH:                              56414 UNCH, 3011 +2.0%

KEEP DOING WHATS WORKING
STOP WHAT ISNT.

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

Joke of the Day:
https://www.youtube.com/shorts/xYVu5VSUsVk

Vol is at HUGE LOWS

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