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Daily Market Outlook, June 3, 2024

Asian equity markets kicked off the week positively amid fluctuating expectations for global interest rates, especially in the US. Late Friday, US data confirmed April inflation expectations based on the Fed's preferred PCE deflator measure, but also indicated weaker consumer spending, which led to lower US Treasury bond yields and put pressure on the US dollar. Meanwhile, China's Caixin manufacturing PMI increased to 51.7, reaching its highest level in nearly two years. As we enter June, there are two major market events to look forward to at the end of the week. The European Central Bank will announce its rate decision on Thursday, followed by the release of U.S. non-farm payrolls on Friday. The U.S. has a busy data schedule ahead, including ISM manufacturing PMI, factory orders, JOLTS job openings, ISM services PMI, and weekly jobless claims. The non-farm payrolls report previously showed a gain of 175,000 jobs. In the eurozone, German industrial production will be the highlight of a light data calendar. The ECB is expected to reduce rates by 25 basis points to 3.75% on Thursday, but may take a cautious and data-driven approach to further cuts as inflation eases. ECBWATCH predicts 57.74 basis points of cuts for 2024. The UK will have a quiet week with construction PMI’s being the only significant data release, investor attention will be on the upcoming July 6th election, with party manifesto’s likely to be published later this week. There is little notable data expected from Japan this week, so focus may shift to Bank of Japan Deputy Governor Ryozo Himino's panel discussion on business and the economy on Tuesday. Additionally, BOJ board member Toyoaki Nakamura will deliver a speech and hold a press conference on Thursday. There are no scheduled Fed speakers this week in the lead-up to the June 11-12 monetary policy meeting. Overall, market positioning anticipates that the US data will support the Fed's current position to keep interest rates steady for a while longer, possibly until late in the year when markets start to factor in the first rate cut. Overnight Newswire Updates of Note Fed’s Kashkari Says Interest Rates Should Stay On Hold For ‘Extended’ Time Key Engines Of US Consumer Spending Are Losing Steam All At Once Homebuyers Are Starting To Revolt Over Steep Prices Across US China’s Defence Chief Turns Down Temperature On Tensions With US China Steps Up Warning To EU Just Days Before Tariff Decision Caixin PMI Signals Faster Mfg Growth In Contrast To Official Gauge Japan’s Firms Trim Spending, Reflecting Headwinds To Growth RBA Seen As The Only Other Major Central Bank At Risk Of Hiking Australia Raises Minimum Wage 3.75%, Aiding RBA Inflation Fight OPEC+ Agrees To Extend Production Cuts In Bid To Boost Oil Prices Nvidia Unveils Next Generation Of AI Chips In Bid To Entrench Lead AMD Announces Future AI Chips, Will Speed Rollout Of New Models Netanyahu Shrinks From Ceasefire Plan As Far-Right Ministers Revolt (Sourced from Bloomberg, Reuters and other reliable financial news outlets) FX Options Expiries For 10am New York Cut (1BLN+ represent larger expiries, more magnetic when trading within daily ATR) EUR/USD: 1.0805 (1.4BLN), 1.0835-45 (750M), 1.0850 (1BLN) 1.0855-60 (1.2BLN), 1.0870 (1.4BLN) USD/CHF: 0.9000 (200M), 0.9025 (250M). EUR/CHF: 0.9875 (350M) GBP/USD: 1.2725 (229M) EUR/SEK: 11.5650 (300M) AUD/USD: 0.6625 (540M), 0.6640-50 (318M) USD/CAD: 1.3620-30 (426M) USD/JPY: 157.00 (931M), 158.00 (861M) CFTC Data As Of 31/05/24 Japanese yen net short position is -156,039 contracts Euro net long position is 57,572 contracts Swiss franc posts net short position of 44,366 contracts British pound net long position is 25,402 contracts Bitcoin net short position is -756 contracts Equity fund managers raise S&P 500 CME net long position by 31.431 contracts to 978,007 Equity fund speculators increase S&P 500 CME net short position by 12,145 contracts to 330,057 Gold NC Net Positions increased to $236.6K from previous $229.8K Technical & Trade Views SP500 Bullish Above Bearish Below 5270 Daily VWAP bullish Weekly VWAP bullish Below 5230 opens 5190 Primary support 5190 Primary objective is 5379

EURUSD Bullish Above Bearish Below 1.0830 Daily VWAP bearish Weekly VWAP bullish Above 1.880 opens 1.0940 Primary resistance 1.0981 Primary objective is 1.0550

GBPUSD Bullish Above Bearish Below 1.2750 Daily VWAP bearish Weekly VWAP bullish Below 1.2700 opens 1.2640 Primary support is 1.2590 Primary objective 1.2640

USDJPY Bullish Above Bearish Below 156 Daily VWAP bullish Weekly VWAP bullish Below 156 opens 154.50 Primary support 152 Primary objective is 165

XAUUSD Bullish Above Bearish Below 2360 Daily VWAP bearish Weekly VWAP bearish Above 2365 opens 2390 Primary support 2300 Primary objective is 2239 Below 2300

BTCUSD Bullish Above Bearish below 67000 Daily VWAP bearish Weekly VWAP bullish Below 67000 opens 65500 Primary support is 65000 Primary objective is 73400

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Publication date:

2024-06-03 10:46:38 (GMT)

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