Headlines:

• Reminder: It is a US holiday today
• Swiss franc continues to pace its advance after SNB policy pivot
• ECB’s Kazaks says would support 25 bps hike in July, 50 bps hike in September
• ECB’s Kazaks: We do not target specific spread levels
• ECB’s Centeno: There is a great determination to deal with fragmentation risk
• BOJ’s Kuroda: Important for exchange rate to move stably reflecting economic fundamentals
• Germany May PPI +1.6% vs +1.5% m/m expected
• SNB total sight deposits w.e. 17 June CHF 751.8 bn vs CHF 753.1 bn prior

Markets:

• AUD and NZD lead, USD lags on the day
• European equities higher; S&P 500 futures up 0.8%
• Gold down 0.1% to $1,837.62
• WTI crude up 0.7% to $110.30
• Bitcoin up 1.6% to $20,875

With it being a long weekend in the US, markets are seeing less appetite to stray away from Friday’s bit-part relief.

Equities are trading a little higher after a dreadful escapade last week, with European indices holding decent gains with US futures also ticking higher. The dollar is seeing a bit of a retreat across the board as such amid the calmer risk tones.

EUR/USD was steady during the session around 1.0510-30 after advancing in Asia from its opening gap lower around 1.0475. Meanwhile, GBP/USD also recovered some ground in a push from 1.2230 to test its 200-hour moving average at 1.2281.

USD/JPY was little changed but retreated from 135.10 to 134.80-90 levels as the yen keeps pace with the dollar at the back of the group.

Elsewhere, AUD/USD and NZD/USD are both up 0.9% on the day to 0.6990 and 0.6360 respectively while the franc continues to push for gains after the SNB policy pivot last week. USD/CHF is down 0.5% to 0.9650 with the low earlier touching 0.9620.

It’s going to be a quiet one in the session ahead with Wall Street out for the day but there will be a couple of ECB and Fed speakers to keep things moving along as the new week gets underway.

This article was written by Justin Low at www.forexlive.com.

Steady as she goes for the Swiss franc as it continues to creep higher after the SNB policy pivot last week.

The downside push in USD/CHF ran into trendline support before stalling at the end of last week and that is the key area being tested once again currently. That said, the double-top pattern just above 1.0000 is an ominous technical signal when you couple it with the change in the narrative at the SNB.

A push below the trendline support will bring into focus the late May and early June lows around 0.9545-56 next.

Elsewhere, EUR/CHF is also down 0.4% to 1.0135 as the pair continues to look towards parity. Meanwhile, CHF/JPY is making a run for it above 140.00 – touching fresh highs since 1980 upon the break higher from the end of last week.

This article was written by Justin Low at www.forexlive.com.

• Inflation would need to surprise on the low side for it not to be 50 bps in September
• But investors should not think that 50 bps rate hikes are the new default
• Market expectation of the terminal rate shot up quite dramatically last week
• One should be careful about the speed, not get carried away

Well, if they’re concerned about markets getting carried away then they should have done a better job in terms of communicating their policy outlook from the get-go. Their first mistake was sticking with the ‚transitory‘ narrative for too long. Things have just been snowballing from there ever since.

This article was written by Justin Low at www.forexlive.com.

• But we try to ensure proper transmission
• The increase in spreads has been very fast
• Fundamentals are unlikely to have changed that fast

Sure, sure. But that’s not what Visco said last week here. In any case, they continue to talk up the „fundamentals“ but again how can you really talk about that without addressing the fact that there are risks related to fragmentation and markets are well within their means to look to price that in. *cries in Italian debt*

This article was written by Justin Low at www.forexlive.com.

• Prior 0.0%

Looking at the details, civil engineering activity decreased by 5.5% while building
construction activity increased by 0.1% on the month. That reaffirms some softness in the construction sector to start Q2 in the euro area.

This article was written by Justin Low at www.forexlive.com.

I can’t remember many things that have ever fallen for 12 straight days but here we are. Bitcoin is down another $2420 today, breaking the $20,000 level and continuing lower to $18,171, which is scarcely above the session lows.

This is the lowest since mid-December 2020 and there isn’t much in the way of support on the weekly chart.

While bitcoin’s 12% decline today is bad, the 14.5% drop in ethereum is even worse. It’s broken $1000 for the first time since January 2021 and has continued to $932.

Last week we highlighted the importance of $1700 as support and — wow — did it ever implode after the break. It’s down 45% in less that two weeks.

The catalyst for the latest leg down was the implosion of luna, followed by the problems at Celsius and then the evident downfall of the crypto hedge fund 3AC.

Nothing goes straight down forever and bear-market bounces can be incredible. As bad as these charts look, there will be bounces but right now it’s a negative feedback loop to the downside.

Even more worrisome are the persistent questions about the usefulness of Web 3.0. The idea of a decentralized and permissionless internet is intoxicating but a decade later, we’re still struggling develop for legal use cases. At the same time, the cheap money has dried up so it will be increasingly difficult to build something novel. Hopefully the seeds have been planted for something besides speculation and money laundering.

This thread from the founders of AirBnB and Box made a good point about product-market fit in a January thread.

Levie added to this today, saying:

„And this was the diplomatic version 🙃. I don’t believe it’s a good idea for the tech industry to be running around saying we’ve figured out a revolutionary new internet (which is patently untrue) while taking in consumer investment in a flawed system before PMF.“

That’s a stinging critique but it’s also a sign of the phase that we’re in right now. People are gnawing at the core of the idea.

This article was written by Adam Button at www.forexlive.com.

Cash stock markets, bonds and FX are closed on Monday in the US (there may be skeleton staffing at some bank desks). 

CME futures hours are, in summary (there are exceptions): 

• Globex is open for a few hours on Sunday evening (see rows 5 to ( in pic below)(1700 to midnight Chicago time), 19 June.
• Globex is then closed for Monday with a reopening Monday afternoon (Chicago time).

See the pic below:

For (much!) more detail, check this out:

• CME Group Holiday Calendar

You can download the Excel info sheet as shown below:

This article was written by Eamonn Sheridan at www.forexlive.com.

• US stocks close mixed. Down for the week
• WTi crude oil settles at $107.99 for August delivery
• Coinbase exec says more job cuts cannot be ruled out should the crypto selling continue
• Baker Hughes Oil rigs up 4 rigs to 584
• Putin: Restoration of relations with Ukraine is inevitable
• Major European indices end the day mostly higher (sans UK FTSE100), but lower for the week
• Fed report: Investment may be moderating but consumer spending remains strong
• Fed’s Kashkari: I could support another 75 bps in July
• Fed’s George said she dissented because the 75 bps move added uncertainty
• US May leading indicators -0.4% vs -0.4% expected
• US May industrial production +0.2% vs +0.4% expected
• Fed’s Bullard: Both the FED and ECB have credibility, a soft landing is feasible
• Fed’s Powell: A US digital currency could help maintain US dollar’s standing
• The panic over US 30-year mortgage rates misses a big part of the equation
• Teranet Canada May home price index +2.3% m/m vs +2.7% prior
• Canada May producer price index +15.0% y/y vs +16.4% y/y prior
• The CHF is the strongest and the JPY is the weakest as the NA session begins
• Now we know how much angst was priced into the yen
• ForexLive European FX news wrap: Franc gains extend, dollar steadies on market respite

The USD moved lower yesterday helped by the Swiss National Bank surprise tightening, and a string of weaker data.

Today the story was different. The Bank of Japan kept rates unchanged and said that they would continue the put a ceiling on the 10 year yield by being a buyer.  The industrial production was weaker than expected but Fed’s Kashkari – usually one of the more dovish Fed members – said that he would welcome another 75 basis point.  Giving equal time to another view, KC Pres. George, who dissented against the 75 basis point hike, said she did so because:

„The speed with which we adjust the policy rate is important,  Abrupt changes can be unsettling to households and small businesses.“

Meanwhile the Fed’s semiannual monetary policy report had a little something for everyone

• Recent indicators suggest that private fixed investment may be moderating but consumer spending remains strong
• Our commitment to restoring price stability is unconditional
• Real GDP appears on track to rise moderately in the second quarter
• Further risks to global supply chains abound
• Some measures of wage growth appear to have moderated
• Some signs of easing the labor market have appeared
• High inflation, supply chain disrutpions and the Ukraine war remain substantial sources of uncertainty with the potential to add stress to the system

A positive for inflation this week potentially is the sharp fall in oil prices. The high price this week reached $123.66. The low price for the July contract which tops trading on Tuesday reached $108.33. That was the lowest level May 20. The 100 day MA is at $104.77. That MA will be eyed as a key barometer for the buyers and sellers next week if the price does continue the rotation to the downside.  

The strongest to the weakest of the major currencies

Looking at the strongest to the weakest, the USD is the strongest while the JPY is the weakest at the end of the day

Some technical highlights going into the weekend (and into the new week):

• EURUSD: The EURUSD dipped to and briefly through the 100 hour MA at 1.04576 currently (and moving higher). That came after a break above the 200 hour MA yesterday that failed into the close and stayed below in trading today. The price is trading between the 100 hour MA below at 1.04576 and the 200 hour MA above at 1.05415.  The price near the end of week is at 1.0496. Next week, the MAs will help to define the next bias move for currency pair. Move below the 100 hour MA is more bearish.  Move above the 200 hour MA is more bullish. 
• GBPUSD: The GBPUSD moved down today, and in the process fell back below the 38.2% at 1.2213 and a swing area near that level between 1.22038 and 1.2216. The pair then extended to another swing area between 1.2154 and 1.2173. The 100 hour MA was within that area at 1.21582. The price bounced modestly into the close and is settling just above the 38.2% at 1.2213. Next week, the 100 hour MA below will be a key barometer on the downside. Stay above would be good for buyers.  Move below is more bearish.  On the topside, watch 1.2260 and above that the falling 200 hour MA and 50% of the move down from the May high at 1.22995. That is also near the natural resistance at 1.2300.
• USDJPY: The USDJPY fell yesterday and rose today more than the fall. The price moved back above its 100 and 200 hour MAs at 134.19 area (they are near converged). The price is settling near 134.95. The high for the week reached 135.577 which was the highest level going back to 1998. The buyers remain in control above the 100/200 hour MA.  When speaking of 24 year highs, it is tempting to sell, but there is not technical reason to do so unless those hour MAs can be broken – and remain broken. 
• USDCHF: The USDCHF took a breather today – consolidating in an up and down range. Teh move higher did extend briefly above a swing area at 0.9713 to 0.9723 (swing levels on hourly from June 6 to June 9), but moved back below that area into the close (the price is trading at 0.9700).  IF the price cannot get and stay above 0.9723, the buyers are not winning.  The sellers remain in full control. 
• USDCAD> A new 2022 high was reached in the USDCAD today, but only by 2 pips at 1.3078. The price moved back below a near high swing area between 1.3037 to 1.30515. Those levels are tempting to sell against after the double top, but it is tough picking a top too. Sellers would feel more confident on a move back below a swing area between 1.2949 and 1.29805. The rising 100 hour MA is at 1.29378. The price declines yesterday found dip buyers against the 100 hour MA line.  
• AUDUSD: The AUDUSD stalled on Thursday’s run up against the 200 hour MA and 50% of the move down from the June high at 0.7066. The move down today, stepped back below the lower 100 hour MA at 0.6955 and stayed below. That put the sellers back in control. The price is closing at 0.6934.  Next week, stay below the 100 hour MA keeps the sellers in control.  A swing area comes between 0.6891 to 0.69168 on the downside, ahead of the low this week at 0.68499 and the low from May at 0.6829.  

This article was written by Greg Michalowski at www.forexlive.com.

The major US stock indices are closing the day with mixed results:

• Dow industrial average is down -38.31 points or -0.13% at 29888.79
• S&P index is up 8.09 points or 0.22% at 3674.85
• NASDAQ index is up 152.26 points or 1.42% at 10798.36
• Russell 2000 is up 15.85 points or 0.96% at 1665.69

Some details for the day:

• Major indices are down for the 3rd straight week
• The Dow was down -274 point at the session low
• The S&P was down -29.95 points at the session lows
• The Nasdaq was down only -7.3 points that the session lows
• NASDAQ index trades -33.4% below its record high
• S&P is -23.7% below its record high
• Dow is down -19.12% below its record high. At the lows week the Dow industrial average was down -19.75% from its all-time high just short of bear market territory.
• The NASDAQ index closed just above its 200 week moving average at 10795.92 averting the first close below that level since the week of March 16.

For the week:

• Dow industrial average fell -4.7%
• S&P index fell -5.78%
• NASDAQ index-4.68%
• Russell 2000 fell -7.48%

This article was written by Greg Michalowski at www.forexlive.com.

NZDUSD trades between the 100/200 hour MAs

The NZDUSD – like other pairs vs the USD yesterday – saw the pair shoot higher. The move extended above the 100 and 200 hour MAs, and for this pair also extended briefly above the 50% retracement at 0.63857.

However, going into the close yesterday, the price rotated lower to the 200 hour MA closing near that MA barometer.

In the US session today, the price moved lower. After initially finding support near a swing area neat 0.6311, the pair bounced, before rotating back down through the 0.6311 level toward the lower 100 hour MA (blue line) at 0.6277.

The low moved through that MA , but rebounded back above and is currently trading between the 100 hour MA below and the 200 hour MA above and near the 0.6311 swing level. The price is within a neutral technical area, awaiting the next shove.

Next week, traders will be eying the MAs for bias clues. Move above the 200 hour MA is more bullish. Move below the 100 hour MA is more bearish.

With focus mostly driven by what the USD does of late, on the calendar is existing home sales on Tuesday. Existing home sales account for 80% or so of home sales. So it will be an important barometer for the health of that sector as rates soar. This week Housing starts and building permits all declined sharply.

Fed speak will also be a focus, with Fed Chair Powell. testifying on Capitol Hill on Wednesday and Thursday being the highlight. .

This article was written by Greg Michalowski at www.forexlive.com.