Daily Market Outlook, June 26, 2023
Munnelly’s Market Commentary…
Asian equity markets showed limited movement following losses on Wall Street Friday, as weak global PMI data and a lack of fresh catalysts kept markets subdued. The weekend news cycle was dominated by the brief uprising of the Wagner Group in Russia. The Nikkei 225 in Japan experienced choppy trading as investors digested the latest Summary of Opinions from the Bank of Japan (BoJ). The summary largely reiterated the central bank's dovish stance, emphasising the need to maintain current monetary easing and the premature nature of any policy shifts. However, one member suggested that the BoJ should consider reviewing its yield curve control (YCC) framework in the near future while continuing with easy monetary policy.
The Hang Seng in Hong Kong and the Shanghai Composite had mixed performances, with the Hong Kong benchmark trading within a range and the mainland market underperforming. The return from the Dragon Boat Festival revealed that travel spending remained below pre-COVID levels, adding to concerns about weak domestic demand and slower consumption.
The start of the week has a scant data docket. In Europe, the German Ifo survey is expected to show a slight moderation in June. In the US, the Dallas Fed Manufacturing Business Index for June is set to be released. Attention will also be focused on the ECB's Sintra forum, where President Lagarde is expected to deliver welcome remarks. ECB officials have been reassuring markets about their ability to contain inflation, and this message was likely to be reiterated during the conference. The gathering of central bank officials, including the heads of the ECB, Federal Reserve, Bank of England, and Bank of Japan, will be closely watched given the global challenges of inflation and borrowing costs. However, no new information is anticipated as many of these officials had recently made statements following policy decisions.
CFTC Data As Of 23-06-23
(USD net spec short grew in Jun 14-20 period; $IDX -0.76%
EUR$ +1.15% in period, specs -7,173 contracts into strength, now +144,649
$JPY +1.31% in period, JPY soft amid rate divergence, specs -3,680 contracts
GBP$ +1.21%, specs get long ahead of CPI/BoE, +39,873 contracts now +46,608
Specs guessed right higher CPI, +50bp BoE but GBP$ -150 pips from weeks high
AUD$ +0.3% in period, specs +12,129 contracts on hawkish RBA, now -33.5k
BTC +8.96%, specs 346 contracts into strength, halved long to +397 contracts (Source: Reuters)
FX Options Expiries For 10am New York Cut
(1BLN+ represent larger expiries, more magnetic when trading within daily ATR)
EUR/USD: 1.0815 (471M), 1.0825-35 (464M) , 1.0855-60 (641M)
1.0950-55 (335M)
EUR/CHF: 0.9800 (323M). GBP/USD: 1.2730 (204M)
AUD/USD: 0.6675 (300), 0.6775 (295M)
Overnight News of Note
Fed’s Bowman Says Bank Supervision Preferable To Capital Rules
US Officials See Weakened Putin, Russia Turmoil Reveals 'Cracks'
Silence Cloaks Russian Kremlin After Armed Mutiny Against Putin
S&P Global Cuts China 2023 Growth Forecast To 5.2% From 5.5%
China Senior Economic Official: Must Act Fast To Bolster Recovery
BoJ Member Called For Early Tweak To YCC, Yen Worry Resurface
Japan Forex Official Warns 'Rapid And One-Sided' Weakening Yen
ECB Entering Final Stretch Of Interest Rate Hikes, De Guindos Says
ECB's Makhlouf Says Undecided About Rate Increases Beyond July
UK To Tame Inflation With Greedflation And Public Pay Crackdown
Swiss National Bank Governor Jordan Flags Further Rate Increases
OPEC Forecasts Global Oil Demand Rising To 110Mln BPD By 2045
(Sourced from Bloomberg, Reuters and other reliable financial news outlets)
Technical & Trade Views
SP500 Bias: Intraday Bullish Above Bearish Below 4340
Below 4330 opens 4300
Primary support is 4300
Primary objective is 4580
20 Day VWAP bullish, 5 Day VWAP bearish
.png)
EURUSD Intraday Bullish Above Bearsih Below 1.0920
Below 1.0880 opens 1.0830
Primary support is 1.0666
Primary objective is 1.1050
20 Day VWAP bullish, 5 Day VWAP bearish
.png)
GBPUSD Bias: Intraday Bullish Above Bearish Below 1.2750
Below 1.27 opens 1.26
Primary support is 1.2680
Primary objective 1.2880
20 Day VWAP bullish, 5 Day VWAP bearish
.png)
USDJPY Bullish Above Bearish Below 142.20 - Target Hit, New Pattern Emerging
Below 141.90 opens 140.90
Primary support is 139.50
Primary objective is 143.49
20 Day VWAP bullish, 5 Day VWAP bullish
.png)
AUDUSD Bias:Intraday Bullish Above Bearish Below .6806
Below .6720 opens .6648
Primary support is .648
Primary objective is .6917
20 Day VWAP bullish, 5 Day VWAP bearish
.png)
BTCUSD Intraday Bullish Above Bearish below 29500
Below 28000 opens 26900
Primary resistance is 27400
Primary objective is 31600
20 Day VWAP bullish, 5 Day VWAP bullish
.png)
Disclaimer: The material provided is for information purposes only and should not be considered as investment advice. The views, information, or opinions expressed in the text belong solely to the author, and not to the author’s employer, organization, committee or other group or individual or company.
Past performance is not indicative of future results.
High Risk Warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75% and 75% of retail investor accounts lose money when trading CFDs with Tickmill UK Ltd and Tickmill Europe Ltd respectively. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Futures and Options: Trading futures and options on margin carries a high degree of risk and may result in losses exceeding your initial investment. These products are not suitable for all investors. Ensure you fully understand the risks and take appropriate care to manage your risk.
Patrick has been involved in the financial markets for well over a decade as a self-educated professional trader and money manager. Flitting between the roles of market commentator, analyst and mentor, Patrick has improved the technical skills and psychological stance of literally hundreds of traders – coaching them to become savvy market operators!