USD holds at highs (USDIndex 104.13), Stocks mixed on Friday & third week lower (S&P500 -5.79% & worst week since March 2020, down -23% YTD) For the Dow, this was the 11th weekly decline out of the last 12 weeks, the worst trend ever. Futures steady. Yields rallied (US 10yr 3.24%), Asian markets have mostly slipped, (Nikkei -1.00%). Oil tanked close to -6% on Friday on fears of recession and Gold remains pressured by rising yields & strong USD. BTC broke below $20k over the weekend. Chinese imports of Russian oil +55%. Fed’s Waller & Kashkari support hiking another 75 bps in July, Mester said 2% inflation will take at least 2-yrs and Macron has lost his parliamentary majority, under pressure from both left & right.

Week Ahead – Will be dominated by Central Bank Speak topped by FED Chair Powell’s  2-day testimony to Congress. CPI & PMI data also due this week.

• USDIndex rallied to 104.80 on Friday and holds at 104.15 today. 
• Equities – USA500 +8 (+0.02%) at 3674, US500FUTS at 3691 now.
• Yields 10-year yield higher (3.24% at close), trades at  3.23% now.   
• Oil & Gold had weaker sessions – USOil crashed to $105.75 Friday from over $123 earlier in the week, trades at $108.00.  Gold could not breach $1850 and trades at  $1840 now.   
• Bitcoin crashed to $18.8k continues to pivot around $20K.
• FX markets – EURUSD down at  1.0525,  USDJPY holds at 135.00 zone (24-yr high) and Cable trades down at 1.2240. 

Overnight –  PPI in Germany hotter (1.6% vs 1.5%) down from 2.8% last month but up to 33.6% y/y in May.

Today – Speeches from Fed’s Bullard, ECB’s Lagarde, Lane, Panetta, Kazaks & BoE’s Mann, Juneteenth holiday in the US.

Biggest FX Mover @ (06:30 GMT) AUDUSD (+0.75%). Moves higher from 0.6900 test on Friday to  0.6980, as AUD gets a bid in the Asian session. Next key resistance 0.7000. MAs aligning higher, MACD histogram negative but turning higher, RSI 57 & rising,   H1 ATR 0.0017, Daily ATR 0.0072.

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Stuart Cowell

Head Market Analyst

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