Asian Indices:
- Australia's ASX 200 index fell by -1.7 points (-0.02%) and currently trades at 7,194.80
- Japan's Nikkei 225 index has risen by 141.84 points (0.46%) and currently trades at 33,334.48
- Hong Kong's Hang Seng index has fallen by -301.81 points (-1.57%) and currently trades at 18,870.24
- China's A50 Index has fallen by -87.28 points (-0.69%) and currently trades at 12,479.26
UK and Europe:
- UK's FTSE 100 futures are currently down -1 points (-0.01%), the cash market is currently estimated to open at 7,499.49
- Euro STOXX 50 futures are currently up 1 points (0.02%), the cash market is currently estimated to open at 4,345.75
- Germany's DAX futures are currently up 1 points (0.01%), the cash market is currently estimated to open at 15,950.00
US Futures:
- DJI futures are currently up 30 points (0.09%)
- S&P 500 futures are currently up 3.75 points (0.08%)
- Nasdaq 100 futures are currently up 23.75 points (0.16%)
- Australia’s retail trade rose 0.7% m/m to beat expectations of 0.1%, although it appears the numbers are being propped up by an increase in prices over a pickup in demand
- Large retailers sales also beat expectations in Japan, prompting USD/JPY to pull back in slight hopes of BOJ tightening before USD/JPY reversed higher
- Credit rantings agency Moody’s estimates that the US economy can weather a slowdown in China, but think that domestic fiscal policies and geopolitics more provide more risk for the economic outlook
- Goldman Sachs have forecast another 50bp BOE hike next month which would take interest rates to 5.5%, in line with the RBNZ at the top of the FX major table
- Asian indices traded in relatively tight ranges and index futures for the US and Europe are mixed, which suggests cautions trade as we head into the month and quarter end
Can month and quarter-end flows throw some surprises?
With two trade days left for the month of June (and first half of 2023), markets are susceptible to erratic pricing behaviour due to month and quarter-end flows. US equities have had another strong quarter with the Nasdaq 100 up 13.5% (36.8% YTD), with the FANG+ index up 23.7% q/q (or 72.2% YTD). We should therefore be open to the prospects that such strong indices could pull back as we approach tomorrow’s New York close.
Regional and domestic inflation data for Europe
With headline inflation data released for the Eurozone tomorrow, traders will look to inflation reports from Spain and Germany today to try and get a lead over tomorrow’s numbers. Spain kicks of at 08:00 and we’d all like to see it at least repeat last month’s -0.2% m/m print ad for HICP CPI fall further below 2.9% y/y. Several German stats release inflation reports around 09:00 before German nationwide CPI at 13:00. The monthly ESI (European Sentiment Index) at 12:00 also warrants a look for business conditions across Europe, along with consumer and selling price expectations. Basically, the weaker the data the harder it becomes for the ECB to maintain their hawkish mantra, and it could send EUR/USD below 1.0900 and support the DAX.
USD GDP final report is released at 13:30 BST
GDP reports tend not to be the most exciting of the bunch, especially the final revision as it is a lagging read of a lagging data set. But with markets obsessed with the trajectory of inflation and growth, it may spur some pockets of volatility should we see Q1 growth upwardly or downwardly revised by a large enough deviation.
EUR/USD 4-hout chart:
EUR/USD rallied just over 3.5% form the June low to June 23 high, and it appears we’re now within a 3-wave correction against that rally. The initial losses were quite direct before prices retraced higher, yet failed to retest the June high and form a lower high. Momentum has since turned lower and now trade back beneath the weekly pivot point and considering a break of the 1.0886 low. If that support level initially holds, perhaps we’ll see a swing low form below or around the weekly pivot point. The next target for bears is the 1.0843 low, with support also residing around 1.820 and 1.078.
View the full economic calendar
-- Written by Matt Simpson
Follow Matt on Twitter @cLeverEdge
