FXTRADING.com's Exclusive Market Insights for 1 June

Euro zone shares are down 1.4%, as higher than expected inflation adds to concerns of a 0.5% rate hike from the European Central Bank (ECB).??

US shares are down 0.6%, while the US 10-year yield is up 10 bps to 2.84%??

?Oil is down 2.1% to $115.1, gold is down 0.8% to $1838.4, iron ore is down 0.1% to $133.5 and ASX futures are down 0.4%.?

There’s not a lot of movement in the US markets. The rally needs to continue here, because if we start to roll now then we’re likely to make new lows.?

Wheat smashed back through support – so position getting cut at break-even. It' s better to take a small loss than a small profit.?

The grains complex is coming off, and it looks like DBA has peaked.?

$10K student loan forgiveness for every US borrower will add to the inflation thematic.?

Raphael Bostic, President of the Reserve Bank of Atlanta, says a significant fall in inflation this year is a possibility. U.S. Treasury Secretary Janet Yellen has said that she “was mistaken about inflation’s trajectory.”?

?European diesel prices are going up, and feeding the Euro zone inflation problem.?

Euro zone consumer prices rose by 8.1% in May - a record print. This is above the consensus forecast of around 7.8% and compares to 7.4% in April. It puts even greater pressure on an ECB that has been (still reluctantly) recognizing the need to act.?

Looking at inflation in the Baltic countries: Latvia is up 16.4% year-on-year (YoY), Lithuania is up 18.5% YoY, and Estonia is up 20.1% YoY. This is a key reason why the ECB will need to act.?

?When natural gas soars and fertilizer costs quadruple, inflation will run rampant. Energy is the economy.?

?That’s the state of the market as of 1 June – FXTRADING.com hopes that these insights prove useful to its clients and followers.???