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PBOC sets USD/CNY reference rate at 7.1268 vs. 7.1270 previous
398889 June 28, 2024 09:22 FXStreet Market News
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General Market Analysis 28/06/2024
398887 June 28, 2024 09:19 ICMarkets Market News
US Markets Consolidate Ahead of Inflation Data – Nasdaq up 0.3%
US Stock markets consolidated near recent highs as data pointed to a cooling economy and the prospect of rate cuts ahead of key inflation numbers tonight. The three main indexes all edged higher again, the Dow adding 0.11%, the S&P 0.07% with the Nasdaq leading the way with a 0.3% rise. US Treasury yields dropped after the data, the 2-year and the 10-year both losing 3 basis points to finish at 4.716% and 4.288% respectively. The dollar also dropped off recent highs, down 0.1% on the index, but remains near historic levels against the Yen with the intervention threat still high. Oil prices jumped on more geo-political concerns, both in Europe and the Middle East, Brent gaining 1.34% to $86.39 a barrel and WTI rising 1.04% to $81.74 a barrel. Gold prices also had a good day, jumping back 1.2% into recent more familiar ranges to close the session at $2,324 an ounce.
PCE Data to Trump Presidential Debate
And just like that we are back to financial markets analysts playing with a certain individuals name for headlines. The first US presidential debate kicks off this morning in the Asian session and although investors will keep a close eye on the proceedings, the content is very unlikely to be market moving. Much more pressing of course is tonightÂ’s PCE inflation data in the states where investors will be hoping for the data to back up market pricing rather that then consistent more hawkish narrative we have been getting from Fed members. The risk does sit to the topside again with the market pricing in an expected 0.1% month-on-month increase, if we see anything above 0.3% then we could see some substantial corrective moves in the market. Current betting is around 60% for a September rate cut but this would be pushed much further out if we do get a topside surprise with stocks likely to take a hit and yields and the dollar to jump. Anything that confirms recent other data results that the economy is slowing will lead to those rate cut odds increasing and more potential gains in the stock market.
Inflation Data in Focus for Investors Today
There is more than one important inflation data print scheduled in todayÂ’s trading day but in all honesty the others will fall swiftly into the background once we approach the US open and the PCE data release. The Asian session seeÂ’s the release of the key Tokyo Core CPI number early in the day and this is followed by the US Presidential debate which is likely to keep traders amused rather than move markets too much, with most just hoping that both candidates manage to get through it without falling asleep or worse! There are key inflation numbers out of both France and Spain once Europe opens, but the focus for traders will swiftly turn to the New York open. Canadian GDP data is due out alongside the US PCE Price index data but expect the American data to dominate moves. Expectation is for a modest 0.1% month-on-month gain and anything significantly off this print will see big moves across all products as the market recalibrates rate expectations. Later in the day we also have the Chicago CPI number and the Revised University of Michigan Consumer Sentiment release to take us into the weekend.
The post General Market Analysis 28/06/2024 first appeared on IC Markets | Official Blog.
USDJPY hits another fresh 38-year high
398886 June 28, 2024 09:02 Forexlive Latest News Market News
You know the drill by now. USDJPY hits a new 4-decade high, so pay attention to the price action in case the move sees push back from Japanese officials.
Remember, they don’t target specific levels, they usually target volatility of the moves.
At this stage the verbal jawboning is ignored, so if they really are concerned they’ll either need to spook markets momentarily with a rate check, or dive in with intervention.
Either way the moves will be massive and swift, so pay attention and be careful out there.
USDJPY whisker away from 151
RBA Hauser comments a possible headwind for AUD longs
398884 June 28, 2024 08:40 Forexlive Latest News Market News
The AUD got a decent boost this week after hotter-than-expected CPI data for May which showed the weighted YY measure print at 4.0% and the CPI YY SA gauge jump to 4.1%.
As a result of the beat markets repriced quite aggressively on the rate expectations side, with probabilities for a hike in one of the upcoming meetings moving higher across the board.
Below we can see the sharp climb in the expected rate path for the RBA at the time (versus a week and a month ago).
RBA rate expectations
However, despite the rate repricing the AUD gave up some of the gains yesterday following comments from RBA’s Hauser.
Why did we see this reaction, and what does it mean for the RBA and the AUD heading into the next meeting and upcoming data?
Well, below is an extract for his comments from yesterday.
RBA Hauser comments
His comments didn’t sound very convincing of somebody who wanted to hike after this week’s CPI data. If anything, his comments sounded like he was trying to calm down expectations of a hike.
Both the AUD and money markets reacted dovishly to his comments. Below is what rate expectations for the upcoming policy meetings looked like ahead of his comments (higher probability for hikes at upcoming meetings):
RBA rate probabilities before Hauser
And here we can see how money market pricing shifted slightly more dovishly after his comments (seeing a higher probability of a hold):
RBA rate probabilities After Hauser
These shifts of course doesn’t mean that a hike won’t happen, but his comments were enough to see some moderation in rate expectations. It probably won’t be enough to take hikes off the table, but at a minimum poses a marginal head wind for recent AUD longs to consider.
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Japan Industrial Production (YoY) increased to 0.3% in May from previous -1.8%
398881 June 28, 2024 07:57 FXStreet Market News
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
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Japanese Tokyo CPI inflation ticks higher in June, rises to 2.3% YoY from 2.2%
398879 June 28, 2024 07:56 FXStreet Market News
Japanese Tokyo Consumer Price Index (CPI) inflation rose to 2.3% over the year ended in June compared to the previous period’s 2.2%. Core Tokyo CPI inflation (headline CPI inflation less volatile food prices) also rose for the same period, ticking up to 2.1% YoY compared to the previous 1.9% and climbing above the median market forecast of 2.0% YoY.
Core-core Tokyo CPI (headline inflation less both food and energy prices) eased slightly in June, cooling to 1.8% YoY compared to the previous 2.2%. With core-core inflation easing and headline Tokyo CPI sticking just above two percent, it is unlikely the Bank of Japan (BoJ) will be bullied into any immediate changes to its current hyper-easy monetary policy stance.
Economic Indicator
Tokyo Consumer Price Index (YoY)
The Tokyo Consumer Price Index (CPI), released by the Statistics Bureau of Japan on a monthly basis, measures the price fluctuation of goods and services purchased by households in the Tokyo region. The index is widely considered as a leading indicator of JapanÂ’s overall CPI as it is published weeks before the nationwide reading. The YoY reading compares prices in the reference month to the same month a year earlier. Generally, a high reading is seen as bullish for the Japanese Yen (JPY), while a low reading is seen as bearish.
Last release: Thu Jun 27, 2024 23:30
Frequency: Monthly
Actual: 2.3%
Consensus: –
Previous: 2.2%
Source: Statistics Bureau of Japan
Market reaction
USD/JPY continues to hold closely to fresh multi-decade highs above 160.80. The pair broke into its highest bids since 1986 this week, chalking in fresh 38-year highs, and a notable lack of an upswing in Japanese inflation figures is set to keep the Japanese Yen firmly on the back foot.
USD/JPY hourly chart
About Japan’s Tokyo CPI inflationÂ
The Tokyo Consumer Price Index (CPI), released by the Statistics Bureau of Japan on a monthly basis, measures the price fluctuation of goods and services purchased by households in the Tokyo region. The index is widely considered as a leading indicator of JapanÂ’s overall CPI as it is published weeks before the nationwide reading. The YoY reading compares prices in the reference month to the same month a year earlier. Generally, a high reading is seen as bullish for the Japanese Yen (JPY), while a low reading is seen as bearish.
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