Daily Broad Market Recap – June 19, 2024

With US traders off on holiday and traders remaining on the sidelines ahead of this week's closely watched economic events, major assets were trading in lower ranges.

What are the headlines that caught traders' attention in the past trading sessions?

Titles:

• Bank of Japan meeting minutes “Some members” indicated that monetary policy intervention may be necessary if a weak yen affects the bank's expectations.
• Japan's trade deficit It widened from JPY 0.58 trillion to JPY 0.62 trillion in May as imports (1.5% mo/m) outpaced exports (1.2% mo/m)
• Inflation in the United Kingdom It fell to the Bank of England's target range for the first time since 2021, but sterling saw buying pressure as markets focused on rising services inflation and core CPI.
• UK Producer Price Index Inputs for May: -0.1% y/y (-1.0% forecast, -1.4% previous); PPI output at -1.7% (1.9% forecast, 1.1% previous)
• UK retail price index May: 3.0% y/y (3.1% forecast, 3.3% previous)
• Current account surplus in the euro area It expanded from €35.8 billion to €38.6 billion (vs. €35.2 billion expected) in April.
• UK house price index Rose 1.1% y/y (0.3% m/m) in April after a 0.9% rise in March
• Looter: Building confidence for newly built single-family homes It fell 2 points from 45 to 43 in June, the lowest level since 2023, as “persistently high mortgage rates keep many potential buyers on the sidelines.”

Broad market price movement:

As in previous days, there was a lack of consolidated price movement among major assets as traders waited for closely watched market events scheduled for later this week.

The Reserve Bank of Australia (RBA) sparked some volatility during the Asian session after it held interest rates steady as expected, but also revealed that a rate hike was on the table this month.

In the UK, a lower-than-expected headline CPI report did little to garner support for the British pound, as attention turned to persistently higher core and services inflation, suggesting that interest rates may remain high for an extended period.

Meanwhile, crude oil and spot gold prices are hovering around weekly highs, with new buying interest lacking. Traders are in a holding pattern, awaiting policy decisions from the Swiss National Bank (SNB) and the Bank of England (BOE), as well as global PMI reports scheduled for Thursday and Friday.

Forex market behavior: US dollar against major currencies

Overlay of the US dollar against major currencies Chart by TradingView

With no major US reports to stimulate the markets and US traders heading out for the bank holiday, the US dollar remained within narrow ranges against its major counterparts.

The US dollar fell against “riskier” currencies such as the Australian dollar, British pound and Canadian dollar during the Asian and early European trading sessions, but quickly faced choppy trading due to the lack of market-moving headlines.

The dollar ended the day weaker against the Australian dollar and British pound, weighed down by positive reports from the Reserve Bank of Australia and the UK CPI report. However, it managed to maintain its gains against the New Zealand dollar and the yen.

Potential catalysts coming on the economic calendar:

• Swiss trade balance at 6:00 am GMT
• The German Producer Price Index will be released at 6:00 AM GMT
• The SNB's policy decision will be released at 7:30 AM GMT, and will be released at 8:00 AM GMT.
• ECB Economic Bulletin at 8:00 AM GMT
• BoE policy decision at 11:00 AM GMT
• Initial US unemployment claims at 12:30 PM GMT
• US Philadelphia Fed Manufacturing Index at 12:30 PM GMT
• US Housing starts at 12:30 PM GMT
• Eurozone consumer confidence index at 2:00 pm GMT
• EIA Crude Oil Inventories at 3:00 PM GMT
• FOMC Member Barkin will deliver a speech at 7:30 PM GMT
• Australian flash PMI at 11:00pm GMT
• Japan's national core CPI at 11:30 PM GMT

Traders are preparing for a busy trading day as both the Swiss National Bank (SNB) and the Bank of England (BOE) will abandon their monetary policy decisions for June.

Later, the release of the US Manufacturing PMI and FOMC Member Barkin's speech may increase volatility in the major USD pairs. Stay tuned so you don't miss any short or long term trading opportunities!

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