Markets Skeptical Despite Fed's Hawkish Hold; Yen Plunges; ECB Next
| Action Insight Daily Report 6-15-23 |
Markets Skeptical Despite Fed's Hawkish Hold; Yen Plunges; ECB Next |
Fed clearly delivered a hawkish hold overnight, signaling that two more rate hikes are underway. However, market participants appear skeptical about the Fed's aggressive posture. According to Fed funds futures, markets are still projecting interest rate to peak at 5.25-5.00%, anticipating just one more 25-basis point rate hike in July. Moreover, there's over 60% chance that rates will remain at this level by year-end. This sentiment was also reflected in performance of major U.S. stock indices, which closed mixed. While NASDAQ and the S&P 500 managed to end the day with gains, 10-year yield declined and settled marginally below the 3.8% mark. Although Dollar has been recovering, its upside momentum appears limited against European majors and commodity currencies. Meanwhile, Yen is taking the limelight from ECB rate decisions, experience steep selloff in Asia which triggered verbal intervention from the government. Euro also softens as markets await another ECB hike, but more importantly any forward guidance and the new economic projections. Australian Dollar is the strongest one as supported by strong job data, managing to shake off the impact of weaker than expected Chinese economic data. Technically, Bitcoin's break of 25242 cluster support (38.2% retracement of 15452 to 31011) is worth a note. The development argues that deeper correction is underway, with trend line support at around (now at 23230) as the first line of defense. Firm break there will pave the way to 61.8% retracement at 21393 or below. Any downside acceleration in Bitcoin could precede selloff in NASDAQ and overall stock markets. Let's see how it goes. |
GBP/JPY Daily Outlook Daily Pivots: (S1) 176.76; (P) 177.09; (R1) 177.74; More... GBP/JPY's rally continues today and accelerates to as high as 178.83 so far. 100% projection of 148.93 to 172.11 from 155.33 at 178.51 is already met but there is no sign of topping yet. Intraday bias remains on the upside for the moment. Sustained break of 178.69 (as mentioned below) will carry larger bullish implication, and target 161.8% projection of 148.93 to 172.11 from 155.33 at 192.83 next. On the downside, though, break of 176.42 minor support will turn intraday bias neutral first. | |
| GMT | Ccy | Events | Actual | Forecast | Previous | Revised |
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| 21:45 | NZD | GDP Q/Q Q1 | -0.10% | -0.10% | -0.60% | | 23:50 | JPY | Trade Balance (JPY) May | -0.78T | -0.78T | -1.02T | -1.04T | | 23:50 | JPY | Machinery Orders M/M Apr | 5.50% | 3.00% | -3.90% | | 01:00 | AUD | Consumer Inflation Expectations Jun | 5.20% | 5.00% | | 01:30 | AUD | Employment Change May | 75.9K | 16.5K | -4.3K | -4.0K | | 01:30 | AUD | Unemployment Rate May | 3.60% | 3.70% | 3.70% | | 02:00 | CNY | Retail Sales Y/Y May | 12.70% | 13.90% | 18.40% | | 02:00 | CNY | Industrial Production Y/Y May | 3.50% | 3.50% | 5.60% | | 02:00 | CNY | Fixed Asset Investment YTD Y/Y May | 4.00% | 4.40% | 4.70% | | 04:30 | JPY | Tertiary Industry Index M/M Apr | 1.20% | 0.50% | -1.70% | | 06:30 | CHF | Producer and Import Prices M/M May | -0.30% | 0.10% | 0.20% | | 06:30 | CHF | Producer and Import Prices Y/Y May | -0.30% | -0.20% | 1.00% | | 07:00 | CHF | SECO Economic Forecasts | | 09:00 | EUR | Eurozone Trade Balance (EUR) Apr | 5.7B | 17.0B | | 12:15 | EUR | ECB Main Refinancing Rate | 4.00% | 3.75% | | 12:30 | CAD | Manufacturing Sales M/M Apr | 0.70% | | 12:30 | USD | Empire State Manufacturing Index Jun | -14.6 | -31.8 | | 12:30 | USD | Retail Sales M/M May | 0.00% | 0.40% | | 12:30 | USD | Retail Sales ex Autos M/M May | 0.10% | 0.40% | | 12:30 | USD | Initial Jobless Claims (Jun 9) | 248K | 261K | | 12:30 | USD | Import Price Index M/M May | -0.10% | 0.40% | | 12:30 | USD | Philadelphia Fed Manufacturing Survey Jun | -12.7 | -10.4 | | 12:45 | EUR | ECB Press Conference | | 13:15 | USD | Industrial Production M/M May | 0.10% | 0.50% | | 13:15 | USD | Capacity Utilization May | 79.70% | 79.70% | | 14:00 | USD | Business Inventories Apr | 0.20% | -0.10% | | 14:30 | USD | Natural Gas Storage | 97B | 104B |
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