Broad Daily Market Summary – June 26, 2024

Dollar dominance was the name of the game, as risk-off sentiment lifted the safe-haven currency across the board while pulling commodities south.

However, stronger than expected inflation data gave the Australian dollar a fighting chance.

Read on to find out how the rest of the majors and asset classes are faring!

Titles:

• Australia’s headline MI index for May remained flat
• Australia’s headline consumer price index May: 4.0% y/y (3.8% expected, 3.6% previous)
• GfK German Consumer Climate Index for June: -21.8 (-19.4 expected, -21.0 previous)
• UBS Swiss Economic Prospects Index for May: 17.5 (previously 18.2)
• UK CBI sales for May: -24 (+1 expected, +8 previously)
• New home sales in the United States May: 619K (636K expected, previous reading upgraded from 634K to 698K)
• EIA Crude Oil Inventories: +3.6 million barrels (-2.6 million barrels expected, -2.5 million barrels previously)
• Japanese retail sales in May: 3.0% y/y (2.0% expected, previous reading decreased from 2.4% to 2.0%)

Broad market price movement:

Risk sentiment and dollar strength appear to be the main driving forces in financial markets in recent trading sessions, as safe havens advanced while high-yielding assets such as gold and Bitcoin fell throughout the day.

WTI initially had a strong advance before erasing its gains when the Energy Information Administration’s crude oil inventory report recorded a surprise build in inventories, indicating weak demand conditions.

The S&P 500 also struggled to stay afloat but was unable to stay in the green, even after a handful of technology sector stocks like TSLA and AMZN posted some gains. On the flip side, bond yields have been steadily rising as the 5-year auction led to a sell-off in Treasuries.

Forex market behavior: US dollar against major currencies

Overlay of the US dollar against major currencies Chart by TradingView

The US dollar rose against the majority of its counterparts throughout the day, with the exception of the Australian dollar which was able to benefit from the bullish surprise in the CPI numbers.

However, the AUD/USD pair ended up retracing its gains after the CPI, as risk aversion took over the markets as the London session continued.

Meanwhile, the USD/JPY pair’s rise beyond the key psychological level of 160.00 kept traders cautious. Currency interventionBut the lack of any action from the Bank of Japan kept the yen pair above this key level.

Potential catalysts coming on the economic calendar:

• Bank of England Financial Stability Report at 9:00am GMT
• Bank of England Governor Bailey’s speech at 9:30am GMT
• Final reading of US GDP for the first quarter of 2024 at 12:30 pm GMT
• Initial US unemployment claims at 12:30 PM GMT
• US Durable Goods Orders data at 12:30 PM GMT
• US Home Sales Pending at 2:00 PM GMT
• Core CPI in Tokyo at 11:30 AM GMT
• Japanese unemployment rate at 11:30 AM GMT
• Japanese industrial production at 11:30 am GMT

The market spotlight could remain on the US dollar today, as Uncle Sam is scheduled to print the final version of the first quarter GDP along with the weekly initial jobless claims report which tends to spark strong intraday volatility.

Make sure to stay on your toes for more profit-making activity towards the end of the week, month and quarter as well!

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