Market Update – June 2 – USD Ticks Higher, Stocks Slip Yields Firmer

USD moved higher (USDIndex 102.43) Stocks had a weak US session (NASDAQ -0.72%) and Yields rallied to 2.931%. Asian markets followed US lower (Nikkei -0.16%, Hang Seng -1.10%) with China closed today. European FUTS are lower (Italy, Spain & France closed & UK closed until Monday). Central bank outlooks and China’s virus lockdowns remain in focus (Shanghai open but zero policy still in place) amid concern that aggressive monetary policy tightening will weigh on growth outlook. BOC increased rates by 50bp  & Bullard remained very hawkish, both expected. Oil prices bounced ahead of OPEC+ today – Saudi Arabia ready to boost output should Russian production fall.

USDIndex rallied to 102.72 from 101.28 & one-month lows on Monday. Back to 102.40 now.
EquitiesUSA500 -31 (-0.75%) at 4101, US500FUTS at 4100 now. Walmart & Meta -2.49% (Sheryl Sandberg to leave Meta after 14 yrs as COO)
Yields 10-year yield higher (2.931% at close), trades at  2.91% now.   
Oil & Gold had mixed sessions – USOil sank to $111.60 before correcting to $113 now following SA news ahead of OPEC+ meeting, Gold rallied over $1850 to $1852 from $1830 yesterday.  
Bitcoin slipped back under $30K after 3-day move north. Trades at $29.8K now.
FX marketsEURUSD down under 1.0700 again to 1.0670,  USDJPY breaks over  130.00, Cable trades at 1.2500, from 1.2450 yesterday.  

Overnight AUD Trade Balance significantly better than expected.

Today – ADP Employment, Weekly Claims, Weekly Oil Inventories, OPEC+ Meeting, Speeches from Mester & NY Fed’s Logan.

Biggest FX Mover @ (06:30 GMT) USDCHF (-0.54%) A surprise spike in Swiss CPI puts pressure on SNB to act. Pair dived from 0.9640 to 0.9575. MAs aligning lower, MACD histogram negative & breaks 0 line, RSI 35 & falling,  H1 ATR 0.0013, Daily ATR 0.0070.

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Stuart Cowell

Head Market Analyst

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