Daily Market Outlook, June 24, 2024

Munnelly’s Macro Minute…

“Geopolitical Uncertainty Weighs On Risk Sentiment”

Asian markets saw a decline overnight as traders prepared for a week of political uncertainty and upcoming inflation data that could impact bets on global interest rates. Japanese currency official Masato Kanda announced that authorities are ready to intervene to support the yen 24/7 if needed, leading to the yen trading below 160 per dollar.

This week, financial markets will be driven by the U.S. Federal Reserve's preferred inflation gauge and a series of speeches by Fed officials as investors look for insights into the future of interest rates. In the U.S., important data releases include consumer confidence on Tuesday, final Q1 GDP, jobless claims, and durable goods on Thursday, followed by the core PCE price index, Chicago PMI, and final June University of Michigan consumer sentiment on Friday. The lineup of Fed speakers includes San Francisco Fed President Mary Daly, Fed Governors Lisa Cook and Michelle Bowman, and Richmond Fed President Thomas Barkin.

Japan also has a busy schedule with releases such as services PPI and leading indicators, retail sales, Tokyo CPI, jobs, and industrial production. The Bank of Japan's summary of opinions from its June 13-14 policy meeting is due on Monday.

In the Eurozone, the focus will be on sentiment indices, final June consumer confidence, and the German Ifo business climate as there are no major data releases scheduled.

The UK will only see the release of Q1 GDP data, with attention also on Bank of England Governor Andrew Bailey's press conference on the Financial Stability Report.

China is set to publish industrial profits on Thursday and official June PMIs on Sunday. It is expected that profits for January to May will slow from the 4.3% growth in January-April as China's economic recovery faces challenges. The manufacturing PMI will be closely watched for any signs of improvement after factory activity contracted in May.

Overnight Newswire Updates of Note

Schnabel Says Potential Shocks Mean ECB Can’t Precommit On Rates
French Trust Marine Le Pen’s Rn Most On Economy, FT Poll Suggests
Russian Saboteurs Behind Arson Attack At German Factory
BoJ Summary Signals Chance Of July Hike Amid Upside Price Risks
Japan’s Kanda Says Ready To Intervene 24 Hours A Day If Needed
NZ Exports Reach New High In May, Pass $7 Billion For First Time Ever
Apple And Meta Have Reportedly Discussed An AI Partnership
US Prosecutors Recommend DoJ Criminally Charge Boeing
China Agrees To EV Tariff Talks As EU Fights To Avoid Trade War
ByteDance Working With Broadcom To Develop Advanced AI Chip
Chinese Property Developer Kaisa Liquidation Hearing Adjourned To Aug
Netanyahu: 'Intense Fighting' Phase Ending In Gaza But War Not Over
Netanyahu Walks Back Proposal For Gaza Hostage-Ceasefire Deal

(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: 1.0625 (446M), 1.0650 (477M), 1.0690 (1.44BLN)
1.0700-10 (2.3BLN), 1.0720-30 (1.37BLN), 1.0750-55 (817M)
USD/JPY: 159.00-05 (465M), 159.15-25 (264M), 160.00 (323M)
USD/CHF: 0.8910 (1.15BLN), 0.8925 (262M), 0.8950 (301M)
GBP/USD: 1.2630 (570M). EUR/GBP: 0.8485 (235M)
AUD/USD: 0.6500 (427M), 0.6540-55 (567M), 0.6650 (395M)
0.6700 (340M)
USD/CAD: 1.3585-90 (636M), 1.3695-00 (1.6BLN), 1.3800 (277M)

CFTC Data As Of 14/06/24

Equity fund speculators increase S&P 500 CME net short position by 20,612 contracts to 352,937
Equity fund managers raise S&P 500 CME net long position by 13,149 contracts to 967,970
Euro net long position is 43,644 contracts
Japanese yen net short position is 138,579 contracts
British pound net long position is 52,121 contracts
Swiss franc posts net short position of -42,863
Bitcoin net short position is -1,138 contracts