The USDIndex has moved up from 103.00 as US debt ceiling talks progressed but no deal – President Biden “”default is off the table”, House Speaker McCarthy “I believe we can get a deal done,”. US stocks were flat into close, although FUTS are higher today. Yields were the main drivers again with 2yr & 10yr at 7-week highs. Bullard ( 2 more hikes) & Kashkari (possible June pause but rates may have to go north of 6%) remained Hawkish. Asian stocks rallied but are closing lower. USDJPY remains close to 6-mth highs, Gold slipped to $1960, USOil at $72.00 and Bitcoin rallied 3.5% from yesterday’s low at $26.5k.
Overnight – AUD – PMI’s – mixed, Manu. flat & still in contraction at 48.0, Services slipped to 51.8 from 53.7 (was 52.6). JPY – Manu PMI’s grind into expansion mode at 50.8 from 49.5. BOJ Core CPI beat at 3.0% vs. 2.8% & 2.9% prior. UK PSNB (Government borrowing) rocketed £24.7b vs £17.5b & £20.0b
FX – USDIndex declined under 103.00, touched 103.20 ahead off debt talks
and is at 103.15 now. EUR tested into 1.0830 and pivots around 1.0800 now. JPY breached over 138.50, topped at 138.85 (high from November 2022) and holds back at 138.50 now. Sterling collapsed to test 1.2400 again, is capped at 1.2450 and trades at 1.2425 now.
Stocks – US markets closed very mixed (-0.42% to +0.65%). FL -8.54 after losing 24% on Friday, Nike -4.00%, PFE +5.38%, TSLA +4.85% ZM +2.94% (rallied +5% after hours with a Revenue beat and increased Sales forecasts – back to +1.18% after market closed). US500 closed +1.00pt, 4192, FUTS are trading at 4208, above the key resistance at 4175.
Commodities – USOil – Futures tested down to $70.70 again yesterday but hold over $72.20 now. Gold – could not hold the $1975 level and trades at $1962 with key support at the $1950 zone.
Cryptocurrencies – BTC bounced from $26.5k lows from Thursday & Monday and pushed to test $27.5k (21-day EMA) earlier.
Today – US, UK & EZ PMIs (Flash), US Home-Sales, Speeches from Fed’s Logan, ECB’s de Guindos, Nagel, Villeroy & Enria, BoE’s Bailey, Pill, Tenreyro & Mann. Earnings – Lowes.
Biggest Mover @ (06:30 GMT) BTCUSD (+2.12%). From Monday’s test of 26,500 lows the pair is once again testing 27,500 MA’s aligned higher, MACD histogram & signal line positive & rising, RSI 74.51, OB & flat, H1 ATR 127.18, Daily ATR 1030.45.
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Stuart Cowell
Head Market Analyst
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