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Market correlations appear to be stalling so far this week, as commodities rose while stocks and Bitcoin fell.
What’s up with that? How did the rest of the asset classes perform?
Titles:
- New Zealand trade balance for May It went from a deficit of 3 million New Zealand dollars to a surplus of 204 million New Zealand dollars, compared to a surplus estimated at 155 million New Zealand dollars, as exports increased by 2.9% while imports increased by 0.6%.
- Summary of the Bank of Japan’s views He revealed that policymakers discussed another interest rate hike at the June meeting
- Credit card spending in New Zealand was flat in May versus the previous decline of 0.8% year-on-year
- German Ifo Business Climate Index In June: 88.6 (estimate 89.4, previously 89.3)
- EU Industrial Orders Expectations Index for UK in June: -18 (estimated -26, previous -33)
- Bank of Canada Governor Macklem They pointed to weak labor market data, and stressed that they were looking forward to more moderation in wages
- Australian Westpac Consumer Confidence Index in June: +1.7% (previously -0.3%)
Broad market price movement:
Dollar Index, Gold, S&P 500, Oil, 10-Year US Yields, Bitcoin Overlay Chart by TradingView
Monday was relatively light in terms of high-level data releases, which did not leave market players much to chew on for most of the day. Even risk appetite seemed fragile, so asset classes worked with their individual catalysts.
After an early decline, crude oil rose for most of the Asian session, before pulling back and posting a sharper rise to close 1.30% higher. Expectations of increased fuel demand in the summer are likely to push up energy prices, along with potential supply risks resulting from tensions on the Israeli-Lebanese border.
Gold was also on a steady rise, but the S&P 500 was unable to sustain its gains during the day when Nvidia shares fell badly. Bitcoin was also significantly in the red, falling below the $60,000 level.
Forex market behavior: US dollar against major currencies
Overlay of the US dollar against major currencies Chart by TradingView
The US dollar did not have the best start this week, as it barely maintained its small gains during the Asian trading session and ended up in the red against its forex peers.
The euro made the biggest advance, as Macron’s political party continued to lag behind the far-right movement in opinion polls, lifting French stocks to their highest level in 11 days. Stronger-than-expected middle class data, specifically the Confederation of British Industry’s industrial orders forecast report from the United Kingdom, also strengthened the pound.
Interestingly, the Canadian dollar was able to make some gains, despite Bank of Canada President Macklem talking about labor market weaknesses and easing plans, with the oil-linked currency likely to benefit from a rally in the commodity.
Meanwhile, the yen managed to trim its losses, as traders remained wary of intervention in the currency, even after Bank of Japan meeting minutes revealed that policymakers had already considered raising interest rates again this month.
Potential catalysts coming on the economic calendar:
- Canada’s consumer price index numbers 12:30 PM GMT
- US S&P/CS Composite CPI at 1:00 PM GMT
- US CB Consumer Confidence Index at 2:00 PM GMT
- US Richmond Manufacturing Index at 2:00 PM GMT
- FOMC Member Cook’s speech at 4:00 PM GMT
- FOMC Member Bowman’s speech at 6:10 PM GMT
Canada inflation numbers for May These are the top-tier catalysts to watch out for today, as they are likely to impact the Bank of Canada’s policy outlook, especially the prospects of a rate cut in July. Don’t forget to keep an eye on the US CB Consumer Confidence Index as it is a leading indicator of spending and can influence overall market sentiment as well!
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