Market Update – June 22 – Stocks rally, USD & Yields hold, Oil & Yen sink

USD holds at highs (USDIndex 104.51), Stocks closed up over 2% (NASDAQ +2.51%) – (1) dead cat bounce & another bear market rally or (2) signs of peak inflation and peak Fed bearishness ? (Technicals & Fundamentals still say 1). Asian shares closed lower on rapid spread of new Omicron (Hang Seng -1.49%) Yields rheld their gain. Oil also slumped (Brent -3.42%) Gold & BTC slide sideways. Biden expected to announce temp. tax reprieve on gasolineBOJ Mins confirmed they will ease further if necessary “without hesitation” USDJPY hits new 24-year high. NZD hit by weak trade data.

  • USDIndex tested 103.72 on Tuesday before rallying to 104.55 now.
  • EquitiesUSA500 closed +2.45% (3764), US500FUTS slumped to 3719 now.
  • Yields 10-year yield higher, closed at 3.26% trades at 3.29% now.
  • Oil & Gold had mixed sessions – USOil slumped 3% to trade at $104.90. Biden & Omicron news weighed & Gold could not hold $1830 and trades at $1825 now on higher Yields and stronger USD.
  • Bitcoin continues to pivot around $20K, test $22K yesterday, back to $20K now.
  • FX marketsEURUSD hback under 1.0500, USDJPY hit new 24-yr highs at 136.71 and Cable trades down to 1.2225 now, following Inflation news, from 1.2325 highs yesterday.

Overnight – UK CPI hits 9.1% inline but up from 9.0% last month, CORE a tick lighter at 5.9% vs 6.0% & 6.2%, PPI beat 2.1% vs 1.8% & 2.7% prior and RPI also hotter at 11.7% vs 11.4% & 11.1% last time. NZ Trade Balance less than 50% of forecast at . Reuters Poll Fed Path: 75bp July, 50bp Sept & Oct, and 25bp Nov. (at the earliest). Japanese official – FX moves against the Yen “not ideal”

Today – Canadian CPI, EZ Consumer Confidence, Speeches from Fed’s Powell, Barkin, Evans & Harker, SNB’s Jordan ECB’s de Guindos & Elderson, BoC’s Rogers.

Biggest FX Mover @ (06:30 GMT) NZDUSD (-1.18%). Collapsed from test of 0.6360 on Monday & Tuesday to 0.6250, as NZD Trade Balance missed significantly. MAs aligning lower, MACD histogram negative turning lower, RSI 21.25, OS but still falling, H1 ATR 0.00124, Daily ATR 0.00850.

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Stuart Cowell

Head Market Analyst

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#USDJPY – Summer 1998 went to 147.00, Spring 1990 went to 160.00. New 24 yr high today at 136.71

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