Wednesday June 26th , 2024

We enter the trading day with a stronger USD, higher equity market, higher oil prices and higher treasury yield. Light day on the economic data front. The USD is holding to yesterday’s gains in part due to Ged Governor Bowman’s comment that the US economy is not yet at a point where it is appropriate to lower the policy rate.

In other news. International Criminal Court has issued an arrest warrant for Russia's former defence minister, Sergei Shoigu, and the chief of general staff, Valery Gerasimov who are suspected of war crimes. Suspected North Korean hypersonic missile explodes in mid-flight

In currency news. The CNY continues to face headwind against the strong USD. The PBOC signalled some tolerance for a cheaper CNY. The AUD rallied after inflation reading hit a 6-month high. The market is now pricing a 50% chance that the RBA will raise rates in September. The Indonesian Rupiah is trading near a 4-year low. The MXN drifts lower ahead of Thursday’s Bank of Mexico policy meeting. The market expectation is that the central bank will keep interest at its current level. The USD is trading higher against most Asian currencies, gaining 0.05% against the CNY, 0.26% against the JPY, 0.33 against the THB. The AUD is trading 0.29 higher against the greenback while the NZD lost 0.38%. As for the trading currencies, the ZAR appreciated 0.38% against the USD while the MXN lost 0.34%.

In commodity markets. Oil prices inched up (0.84%) nearing their highest level in almost two months, driven by forecasts for an eventual inventory drawdown. Gold prices are muted (down 0.03%) as we await US inflation figures while silver remains unchanged. Copper erased earlier losses but is capped by stronger USD, weak China demand outlook. In the agricultural commodities, wheat recovers from a two-month low as bargain buying came in the market. Soybean traded higher as market assess US Midwest flooding impact.

Current level USD Index???????????????105.793 ? ? ? ? ? ?Up 0.18%

The USD/CAD recovered yesterday after the initial sell-off due to the stronger than expected Canadian CPI. As we start the day, the currency pair remains in a tight range as market participant consider the impact on the CPI figures, rise in oil prices and the uncertainty surrounding the Fed rate-cut.

Current level USD/CAD???????????????1.3682???????????? Up 0.19%

The EUR/CAD resumed its selloff this morning as the nervousness surrounding the French Election continues to impact the EUR. The currency pair is trading near a 2-month low. First round of the election will be held on June 30th while the second round on July 7th.

Current level EUR/CAD????????????????1.4615??????????? Down 0.02%

EUR/USD remains under pressure on the back of the French election and Fed Bowman’s comment that could see the first rate cut in 2025. Rehn sees inflation stabilising at target despite bumps.

Current level EUR/USD????????????????1.0684??????????? Down 0.28%

The GBP/EUR inches higher on the back of the uncertainty caused by Macron snap election call, weak German data and from the higher than expected UK retail sales.

Current level GBP/EUR???? 1.1846 (0.8437)????????Up 0.08%

The GBP/USD comes under pressure as the market switches focus to the upcoming US core PCE inflation. Uncertainty over the UK’s parliamentary elections will also serve as headwind to the GBP recovery.

Current level GBP/USD????????????????1.2662 ???????????Down ?0.17%