Market Update – June 7 – RBA Surprises, Yields Rocket, Yen Dives

USD moved higher (USDIndex 102.78), Stocks also higher into close (NASDAQ 0.40%) but Futures rocked (-0.60%) by a surprise 50 bps hike from the RBA (25-40 bp expected) and noises that there will be more to come. Yields rallied US 10yr over 3.00%, Asian markets have mostly slipped, (Nikkei +0.10%) and YEN has tanked (USDJPY at new 20-year high). UK PM Johnson survives no confidence vote (211 vs 118) 41.2% of his own MPs want  him out UK Gilts rally GBP sinks. Oil slips but holds on to gains, Gold pressured by rising yields.

USDIndex rallied to 102.82 ahead of ECB on Thursday & US CPI on Friday.
EquitiesUSA500 -12 (-0.31%) at 4121, US500FUTS at 4096 now. More worries, following aggressive RBA, TWTR -1.5% after MUSK suggested he could walk away from the deal, AMZN +2% after 20 for 1 stock split. DIDI +23% & BABA +6%, Chinese regulators are reported to have concluded DIDI investigation.
Yields 10-year yield higher (2.987% at close), trades at  3.064% now.   
Oil & Gold had weaker sessions – USOil slipped from $120.00 fhandle to 119.36, Gold sank as Yields rallied from over $1858 to $1840 now.   
Bitcoin rally over $30K was short lived, from $31.8K yesterday to trade at $29.4K now.
FX marketsEURUSD under 1.0680 under 1.0700 again, USDJPY tested 133.00 zone and holds 132.60, Cable trades down at 1.2430,following political upheaval in UK. 

Overnight Mixed data from JPY, Weak UK Housing data and German factory orders missed significantly (-2.7% vs -0.4%)

Today – UK Composite/Services PMI (Final), Canadian Trade Balance

Biggest FX Mover @ (06:30 GMT) USDJPY (+0.67%). Rallies to new 20-yr highs and within a smidge of 133.00 from sub 1.300 on Friday. Next key resistance 134.00 form the Weekly Chart. MAs aligning higher, MACD histogram positive, RSI 77, OB & rising,   H1 ATR 0.233, Daily ATR 1.18.

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Stuart Cowell

Head Market Analyst

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