20 Jun: Fed on hold but cuts are coming. RBA Bulletin and Governor Lowe coming up. BOJ, BOE meetings later.

By | June 20, 2019

 

The Fed has left interest rates on hold, as largely expected, while at the same time signalling the likelihood of a July cut as the Fed believes uncertainties about the outlook have increased, with Powell stating that trade and global growth are key concerns. The dot plot moved lower but it may take more bad trade news and some soft US economic data to get two rate cuts this year but it was enough to place downside pressure on the dollar, which in turn allowed stocks and commodities to finish the session on a firm note.

Notable moves were seen in Sterling, which had rebounded strongly, showing some confidence now that the Tory leadership race seems to be fully priced in, with Boris Johnson way out in front. The Euro also performed well, regaining all of the losses seen after Marion Draghi’s dovish outlook on Tuesday. The commodity currencies tried to rally but ended with only limited gains as traders think that the RBA/RBNZ will be cutting in unison with the Fed.

Gold also had a strong day, closing above 1350 oz while Silver finished above 15.00 for the first time in a couple of months. Stocks

Looking ahead, Thursday gets under way with the RBA Quarterly Bulletin and a speech from the RBA Governor, Lowe, which may cause some volatility in the Aud$, depending on how dovish he is. We then get the BOJ Interest Rate Decision at which no change to policy is expected and the interest is likely to be in the Statement/Press Conference. Next u[, from Europe we get the UK Retail Sales for May (exp -0.5%mm, +2.7%yy) and the BOE Meeting/Statement/Minutes/Vote Count/APP Facility, where again, no change is expected, with the MPC expected to vote 9-0 to keep rates on hold.  Finally, the US will be rather thin and traders will most spend time digesting the FOMC outcome, but data will also include the US Q1 Current Account, the weekly Jobless Claims and the Philadelphia Fed Mfg Survey (exp 11).

Economic data highlights will include:

Thur: RBA Bulletin, Governor Lowe Speech, BOJ Interest Rate Decision, Statement/Press Conference, UK Retail Sales, BOE Meeting/Statement/Minutes/Vote Count/APP Facility, EU Consumer Confidence, US Q1 Current Account, Jobless Claims, Philadelphia Fed Mfg Survey

Market moves, in brief:

FX: DXY 97.26 (-0.38%)

Bonds: US10Y; 2.029% (-1.49%), German 10Y; -0.286% (+10.45%), UK 10Y; 0.865% (+7.29%), Australian 10Y; 1.351% (-1.71%), NZ 10Y; 1.60% (-2.15 %), China 10Y; 3.272% (+0.56%)

Stock Indices: DJI; +0.15%, S+P; +0.30%, NASDAQ; +0.42%, EUStoxx50; +0.05%, FTSE100; -0.53%, Shanghai Composite; +0.96%,

Metals: Gold $1360 oz (+1.00%), Silver $15.15 oz (+1.00%), Copper $2.6805 lb (-0.83%), Iron Ore $106.20 per tonne (NYMEX) (+0.39%),

Oil: WTI $ 54.18 pb (+0.24%)

CURRENCIES
EURUSD: 1.1226
Res  1.1255  1.1280  1.1305
Sup  1.1200  1.1180  1.1155
USDJPY: 108.08
Res  108.25  108.50  108.80
Sup  108.00  107.80  107.55
GBPUSD: 1.2646
Res  1.2675  1.2710  1.2750
Sup  1.2615  1.2575  1.2540
USDCHF: 0.9937
Res  0.9955  0.9975  0.9995
Sup  0.9920  0.9900  0.9880
AUDUSD: 0.6882
Res  0.6895  0.6910  0.6930
Sup  0.6865  0.6850  0.6830
NZDUSD: 0.6539
Res  0.6550  0.6565  0.6580
Sup  0.6525  0.6510  0.6495
INDICES / COMMODITIES
S&P.fs: 2932.78
Res  2935.00  2945.00  2960.00
Sup  2920.00  2905.00  2890.00
DJ30.fs: 26531.50
Res  26585.00  26695.00  26825.00
Sup  26445.00  26350.00  26260.00
SPI200.fs: 6585
Res  6595  6605  6615
Sup  6575  6565  6555
XAUUSD: 1360.54
Res  1365.00  1370.00  1375.00
Sup  1355.00  1350.00  1345.00
XAGUSD: 15.16
Res  15.20  15.30  15.40
Sup  15.05  14.95  14.85
WTI.fs: 54.42
Res  54.85  56.00  57.35
Sup  53.45  52.15  50.70