In case you missed it, the ECB is pretty much likely to go with a „QE but not QE“ option though there will be controversy surely when it is all about backstopping Italy at the expense of others.
This article was written by Justin Low at www.forexlive.com.
Markets:
It was a quiet session for the most part as we kick start the new week. Markets are settling in with risk tones mostly calmer and leaning slightly more positive. Equities are holding higher alongside bond yields, though there wasn’t much significant action in FX.
The yen was a notable mover though as it climbed down to 134.70 in Asia trading before rising back to 135.45 currently amid the better risk tones. The dollar is trading more mixed with EUR/USD holding just a touch higher at 1.0565, up 0.1% on the day, while GBP/USD initially swung higher from 1.2270 to 1.2330 only to fall to 1.2255 during the session.
The aussie and kiwi are the laggards despite the better risk sentiment with AUD/USD down 0.4% to 0.6920 and NZD/USD down 0.3% to 0.6295, at the lows for the day currently.
As much as there is better risk appetite, it is still tough to bet against the dollar in the big picture as long as the Fed continues to talk up a big game in hiking rates. But at least with money markets seeing the potential for lower terminal rates, stocks are able to find some added relief for the time being.
This article was written by Justin Low at www.forexlive.com.
Trade the Russell 2000 at your own risk.
This article was written by ForexLive at www.forexlive.com.
Some token remarks as the Chinese central bank is reaffirming that they will continue to do their job to align with the government’s policies on COVID-19 and the economy in general.
This article was written by Justin Low at www.forexlive.com.
OPEC+ last met earlier this month on 2 June, where they decided to increase output by 648k bpd in July, up from the initial plan of 432k bpd. They are expected to carry that policy stance into August later this week when they meet on 30 June. That is despite the fact that US president Biden will be heading to Riyadh next month – where he is supposedly going to discuss on ‚energy security‘.
Just be wary that the current oil output deal is set to expire in September and even now, they are already struggling to lift output further amid the lack of spare capacity. That is something to take note of when weighing up the tightness in the oil market in general.
This article was written by Justin Low at www.forexlive.com.
DeFi problems (to put it bluntly) are becoming larger in scope and more
frequent in nature, as shown in the chart below which you can view on Comparitech:
Throughout all of it, though, most participants in DeFi would probably
agree that there’s been far more talk than action.
It’s time to stop keeping score
and start making plays.
If you’re old enough to remember the “I’m a Mac / And I’m a PC”
television commercials that ran beginning in 2006, you’ll likely recall the one
that implied that Mac computers didn’t get viruses.
The dirty little secret? Macs were
vulnerable to viruses, but Apple’s share of the personal computer marketplace
was so low in 2006 (just 4.8%) that it wasn’t worth the effort to
exploit them.
Today, we know differently.
And the point is that talk is cheap.
When we first conceived of the idea that led to the Bridges Exchange, we did so with a view
towards helping clean up the “Wild West” nature of DeFi. In fact, Bridges is a
first of its kind (although we hope—not the last): it is the first anti-scam,
dividend-paying, decentralized hybrid exchange-aggregator.
We created the Bridges Exchange because “business as usual” in DeFi has meant
nothing more than the proliferation of tokens—and with them—theft. Like others, we’ve grown tired of
seeing honest investors left penniless and innovative developers whose ideas
are copied at will. For DeFi to realize its full potential, it has to evolve
from being a safe haven for scammers to becoming an ecosystem where every
participant has a legitimate chance for financial freedom and security.
Here’s how we did it:
Regardless of whether you’re a holder or a developer, a novice
participant in DeFi or a seasoned veteran, we invite you to join the mission that Bridges represents and to be part
of the action—and not the talk—about cleaning up DeFi.
You can learn more about the work of Bridges at https://bridges.exchange.
This article was written by ForexLive at www.forexlive.com.
It’s a mixed bag still in Shanghai. The city’s Communist Party chief spoke on Saturday, saying his authorities had „won the war to defend Shanghai“ against COVID. Meanwhile in Shanghai,
In Shenzhen on Saturday an announcement that it would shut all cinemas and parks, and all public events have been suspended in one district after 6 local cases were found. 50% capacity constraints were set for restaurants in the district
Shenzen residents must show a negative COVID-19 test to enter public venues & transport taken within the last 24 hours (from 48 hours previously).
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There are signs of improvement in China, but also setbacks. Volatility in reopening will continue, thus in the economy also.
China is struggling to emerge from 2020:
This article was written by Eamonn Sheridan at www.forexlive.com.
US first quarter growth was flat and the Atlanta Fed tracker for Q2 is currently at 0.0% so it will need to be a strong second half just to get to 2.9%.
In any case, these forecasts offer a sense of where the official consensus is.
As for monetary policy, they called for an ‚assertive and rapid‘ withdrawal of stimulus.
In her comments, Georgieva also hints an global frustration with the intensity of US domestic demand and how it’s boosting prices everywhere. She said misjudgements by the Fed will result in negative outward spillovers to the global economy.
This article was written by Adam Button at www.forexlive.com.
Markets are pricing in a 27% chance that the Fed only does 50 basis points, so she might consider being careful here. And a big reason the market is pricing that in is because that’s what the Fed guided. You can’t tell the market what you’re going to do and then say you’re only doing it because that’s what the market has priced.
In another sign of the mess the Fed finds itself in, Daly cited the UMich inflation expectations survey for the 75 bps hike rather than 50. Today that number was revised back down. She acknowledged that today, saying the revision ‚got my attention‘ while still saying that long-term inflation expectations have ‚ticked up‘.
She also laid out a strategy, saying that if they front load rate hikes they might not have to do as much. This commentary is a bit of a departure from the unrelenting hawkish talk lately.
This article was written by Adam Button at www.forexlive.com.
Markets:
After hiking by 75 basis points instead of the 50 bps he long-ascribed to, Powell cited the jump in inflation expectations in the UMich consumer sentiment survey as a factor. Well, he might have waited until the final data was out, as the numbers were lowered.
The market jumped on that and the odds of just a 50 bps hike in July roughly doubled to 27%. That sentiment weighed on the US dollar and boosted stocks as well with some particularly large moves in the commodity currencies.
CAD was doubly boosted by a rebound in oil that left crude down just $2 on the week — a far cry from the mid-week crash. After touching 1.3000 in Asia, USD/CAD finished on the lows at 1.2880.
AUD/USD was similarly strong and found some breathing room above the double bottom 0.6833 in a climb to 0.6937.
The growing problem is the push-and-pull in bonds. The better tone on risk assets took 10-year yields from a low of 3.03% to 3.14%, with less worry about a recession starting to mean a shift back to worries about inflation. That’s a tenuous dynamic that leaves a narrow window for an extension of this price action.
The US dollar was broadly weak but made some progress against the yen.
Curiously, the pound was able to find few bids despite the positive risk tone. Some of that relates back to worries about growth in the eurozone. For its part, the euro managed to climb 30 pips on the session.
Have a great weekend.
This article was written by Adam Button at www.forexlive.com.