PREVIOUS TRADING DAY EVENTS – 01 June 2023
Announcements:
“We are avoiding default tonight,” Senate Majority Leader Chuck Schumer said on Thursday as he steered the legislation through his 100-member chamber.
“America can breathe a sigh of relief,” Schumer said in remarks to the Senate.
Biden: “This bipartisan agreement is a big win for our economy and the American people,” adding that he will sign it into law as soon as possible.
“In the coming months, Senate Republicans will continue working to provide for the common defence and control Washington Democrats’ reckless spending,” he said in a statement.
Source:
https://www.cnbc.com/2023/06/01/debt-ceiling-bill-updates.html
Note: 10:26 am, Eastern Time (ET) is 5:26 pm GMT+3
ECB policymakers plan to extend their unprecedented tightening campaign.
“There is no clear evidence that underlying inflation has peaked,” Lagarde said in a speech following the latest reading. “We have made clear that we still have ground to cover to bring interest rates to sufficiently restrictive levels.”
Bloomberg Economics’s Maeva Cousin said that “it remains too early for the Governing Council to lower its guard — we expect base effects and statistical distortions to send core inflation up again through the summer and keep the ECB hiking at its next two meetings.”
“Yes, headline inflation is coming down as we start to see the food and energy shocks dissipate,” Laura Cooper, Blackrock senior macro strategist for iShares EMEA, told Bloomberg Television earlier this week.
“But clearly the services inflation, the core gauges, continue to show price persistence and that does suggest that the ECB will have to keep rates in restrictive territory for quite some time,” she said.
Source:
The Labour Market continues to surprise with strength while the U.S. Manufacturing PMI indicates a contraction in manufacturing activity that remains persistent, raising the risks of a recession.
“Labour market conditions are still tight,” said Nancy Vanden Houten, lead U.S. economist at Oxford Economics in New York. “While we expect the Fed to leave rates steady at its upcoming meeting, a more sustained loosening of labour market conditions is needed to keep rate hikes permanently off the table.”
Nonfarm payrolls are expected to be increased by only 190,000 jobs in May after rising by 253,000 in April. The unemployment rate is expected to rise to 3.5% from April’s 53-year low of 3.4%.
Source:
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Summary Daily Moves – Winners vs Losers (01 June 2023)
- Metals managed to get on the top of the winners’ list this week so far, Silver (XAGUSD) is leading with 2.89% gains.
- This month Silver is on top with 1.86% overall price change followed by AUDUSD with 1.71% price change.
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News Reports Monitor – Previous Trading Day (01 June 2023)
Server Time / Timezone EEST (UTC+03:00)
- Midnight – Night Session (Asian)
The Senate approved to suspend the debt ceiling averting the default on its debt late Thursday around 17:30 GMT +3. This caused underlying assets to jump, including oil, metals and stocks.
- Morning – Day Session (European)
Manufacturing PMI figures were reported as per below:
The EUR appreciated against other currencies yesterday while the USD depreciated greatly overall. EURUSD moved higher overall yesterday, near 90 pips upwards, since PMI data started to come out.
The Eurozone manufacturing sector recorded a sharp decline in production, recording the second consecutive decline in May.
U.K.s Manufacturing PMI report shows that manufacturing activity declines faster as new order inflows deteriorate.
The U.S. ISM Manufacturing PMI figure was released at 17:00 showing a lower number than the previous one, though not much lower. The USD depreciated slightly at that time since the impact was not great. The market reacted highly during the Labour market data releases.
The U.S. ADP Non-Farm Employment Change figure was released at 15:15 showing that private sector employment increased by 278K jobs in May, way more than expected. The market experienced a small shock with a slight USD appreciation at that time. A few minutes later, the U.S. Unemployment Claims figure was released at 15:30 indicating 230K jobs, an increase of 2,000 from the previous week’s revised level. The market reacted with USD depreciation causing the DXY to drop rapidly since the release and remain at lower levels without retracing.
Crude Inventory Data were released at 17:00 and showed a 4.49M Barrel increase last week. The market reacted to this news with a jump in oil price of about 3 USD. It was a high turn since the previous figure was negative and -12.5M. Since the 22nd of May Crude’s price had started to climb from nearly 71.7 USD/b, reaching the peak on the 24th of May at nearly 74.70 USD/b before a big decline until the end of the week near 72.8 USD/b.
General Verdict:
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FOREX MARKETS MONITOR
EURUSD (01.06.2023) Chart Summary
Server Time / Timezone EEST (UTC+03:00)
Price Movement
EURUSD was moving around the mean during the Asian Session experiencing low volatility. It started to move more volatile at the beginning of the European session. After 9:00 it started an upward path that lasted until the end of the trading day since the USD was depreciating heavily but at a steady pace, as confirmed by the DXY chart.
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EQUITY MARKETS MONITOR
NAS100 (NDX) 4-Day Chart Summary
Server Time / Timezone EEST (UTC+03:00)
Price Movement
The index started to decline since the 30th of May moving downwards while it was under the 30-period MA. This short-term downward trend did not last for long. Yesterday, the U.S. stock market experienced a jump in stock prices. The index started moving rapidly at around 17:30 and climbed near 220 USD upwards before finding resistance at nearly 14500 USD. It retraced shortly thereafter at the 61.8 Fibo level.
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COMMODITIES MARKETS MONITOR
USOIL (WTI) 4-Day Chart Summary
Server Time / Timezone EEST (UTC+03:00)
Price Movement
On the 30th of May Crude dropped rapidly moving downwards and under the 30-period MA until it found strong support levels at near 69 USD. The price reversed yesterday moving upwards breaking some important resistance first and jumping near 3 USD over the 30-period MA before retracing. It is interesting the fact that this jump is at the same time, at 17:30, as per the stocks jump. Metals also moved higher during the start of the North America Session. Yesterday, around that time, the U.S. Senate passed the Bill.
XAUUSD (Gold) 4-Day Chart Summary
Server Time / Timezone EEST (UTC+03:00)
Price Movement
Gold reversed on the 30th of May crossing the 30-period MA and moving significantly upwards showing signs of an upward trend. This was the opposite path of the NAS100 as described above. As depicted, on the 30th of May, the index started to decline in value. Investors’ risk mood changed and gold was preferred. The dollar index experienced high volatility this week but eventually dropped heavily since yesterday, June 1st. Gold continued the upward trend. The RSI slows down while the price shows higher and higher highs indicating perhaps that if the path is sideways, or even upwards still, high volatility is expected with strong retracements. If we look at the chart 100% technically, the next movement will probably be downwards back to the mean. However, NFP data is about to create a distortion of this technical analysis, at 15:30, with the USD and Gold being greatly affected and generating uncertainty and unpredictable moves at that time.
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News Reports Monitor – Today Trading Day (02 June 2023)
Server Time / Timezone EEST (UTC+03:00)
- Midnight – Night Session (Asian)
No important news announcements, no significant scheduled releases.
- Morning – Day Session (European)
The most important news of the month is about to be released at 15:30. The U.S. Non-Farm Employment Change and Unemployment Rate figures. The Fed has its eyes on the Labour Market data since policymakers expect weak data to support their decision to pause hikes.
U.S. economic data has indeed remained resilient, despite concerns about the debt ceiling and the high interest rates. Today’s jobs report might trigger expectations regarding rates and significantly cause the dollar to appreciate and reverse if the data is strong. Unless the actual figures are significantly weaker, this will signal that the interest rates are likely to go up.
General Verdict:
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