Daily Broad Market Recap – June 20, 2024

Market attention was focused on two major announcements from the central bank, one of which included a surprise interest rate cut.

How did the rest of the asset classes perform?

Titles:

• The People's Bank of China kept interest rates on key one-year and five-year loans unchanged By 3.45% and 3.95%, respectively
• Swiss trade surplus in May: CHF 5.81 billion (CHF 3.84 billion expected, CHF 4.34 billion previously) with exports down 1.6% while imports down 3.8%
• German PPI in May: 0.0% m/m (0.1% expected, 0.2% previous)
• The Swiss National Bank cuts interest rates by 25 basis points to 1.25%. Against expectations to keep interest rates constant at 1.50%, noting the rise of the franc in recent weeks and the risks associated with the development of inflation.
• The Bank of England kept interest rates steady at 5.25%. As expected by a 7-2 vote in the Monetary Policy Committee, but members noted that the August decision was a “straightforward” decision.
• US Weekly Initial Jobless Claims: 238k (235k expected, 243k previous)
• US Building Permits in May: 1.39 million (1.45 million expected, 1.44 million previous)
• US Housing Starts in May: 1.28 million (1.37 million expected, 1.35 million previous)
• Philadelphia Manufacturing Index in June: 1.3 (4.8 expected, 4.5 previous)
• EIA Crude Oil Inventories: -2.5 million barrels (-2.8 million expected, +3.7 million previous)
• Australian flash manufacturing PMI in June: 47.5 (previously 49.7)
• Australian Flash Services PMI June: 51.0 (previously 52.5)
• UK GfK Consumer Confidence Index in June: -14 (-16 expected, -17 previously)

Broad market price movement:

Market participants appear to be hungry for some risk during Asian market hours, as gold and Bitcoin rose while the S&P 500 continued its rise.

However, crude oil traded sideways, before the energy commodity eventually rose after seeing a 2.5 million barrel decline in EIA inventories.

The tide turned for US stocks during the New York session, as the S&P 500 closed 0.2% lower after hitting a new high of 5,500 earlier in the day.

The Nasdaq also fell after tech giant Nvidia reversed earlier gains and closed down 3.5%, lagging the likes of Microsoft and Apple as investors likely cash in on the tech sector's rallies during the first half of this week.

Forex market behavior: US dollar against major currencies

Overlay of the US dollar against major currencies Chart by TradingView

Dollar price action was mostly sideways but slightly in the green during the early Asian session, except for a slight rise in the New Zealand dollar.

USD/CHF volatility rose during the SNB's policy statement when the central bank surprised markets with another 0.25% interest rate cut. The pair managed to maintain its rise at a slower pace in the following hours, before consolidating throughout the US session while still closing 0.86% higher for the day.

Sterling also recorded good moves following the Bank of England's “hold cautious” decision, as policymakers appeared to anticipate a possible cut for August.

Despite the mostly pessimistic data from the US economy, the dollar maintained its safe-haven gains against the majority of its peers, with the exception of the Canadian dollar which is likely to benefit from higher crude oil prices.

Potential catalysts coming on the economic calendar:

• UK retail sales at 6:00 AM GMT
• French Manufacturing and Services PMI at 7:15 AM GMT
• German Manufacturing and Services PMI at 7:30 AM GMT
• The Eurozone Manufacturing and Services PMI is released at 8:00 AM GMT
• The UK Manufacturing and Services PMI is released at 8:30 AM GMT
• Core and headline retail sales data in Canada were released at 12:30 PM GMT
• US Manufacturing and Services PMI at 1:45 pm GMT
• US Existing Home Sales at 2:00 PM GMT

Today is everything Global Purchasing Managers' Index (PMI) numbersThese leading economic indicators are likely to affect the overall market mood during the trading day. A general improvement is expected in Europe, but Uncle Sam may report declines in manufacturing and service sector activity.

Be sure to watch for potential surprises in the data, as well as potential differences in industry performance between major economies!

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