FOMC

The FOMC will likely pause at its June meeting next week to let the banking sector, debt ceiling debate, and TGA refunding dust settle before it considers another rate hike ultimately. The Fed leadership has signalled that it sees pausing as the prudent course because uncertainty about the lagged effects of the rate hikes it has already delivered and the impact of tighter bank credit increases the risk of accidentally overtightening.

In addition, activity data are still sending conflicting signals at a time when the Fed is searching for evidence that demand growth is slowing below potential; this volatility has clouded the underlying picture of the US economy, making the calibration of "sufficiently restrictive" very tricky.

With the market coalescing on a likely June skip, the burden of July policy proof could fall on next week's CPI or even the July jobs report, although arguably, there will be more than a few chords of Fed Speak wood to chop before then.

China

China's post-reopening recovery has slowed incredibly in the second quarter. April macro data were generally weak ex-services. PMI and trade data for May suggest industrial activity remains soft, and deflationary pressure continues to build, as evidenced by today's weaker PPI print causing investor sentiment to weaken even further. Now people are wondering if we are near rock bottom or not. However, given the very visible deflationary impulse and few signs of improvement, we anticipate this could be a lengthy period of gloom with a policy-induced currency devaluation in the offing. Yes, we think things are that dire.

Oil

With little more than a political chess match in play and not knowing the black knight’s next move, oil markets have flatlined until there is absolute confirmation of a possible Iraq nuclear deal or not.

SPI Asset Management provides forex, commodities, and global indices analysis, in a timely and accurate fashion on major economic trends, technical analysis, and worldwide events that impact different asset classes and investors.

Our publications are for general information purposes only. It is not investment advice or a solicitation to buy or sell securities.

Opinions are the authors — not necessarily SPI Asset Management its officers or directors. Leveraged trading is high risk and not suitable for all. Losses can exceed investments.

Recommended Content


Recommended Content

Editors’ Picks

EUR/USD hovers above 1.0850 amid dour mood

EUR/USD hovers above 1.0850 amid dour mood

EUR/USD is oscillating in a tight range above 1.0850 in early Europe on Tuesday. The pair stays cautious due to risk-off sentiment and a modest US Dollar uptick, as investors weigh the ECB and Fed rate cut expectations. The focus now remains on speeches from Fed officials. 

EUR/USD News

GBP/USD posts small gains above 1.2700, awaits fresh catalysts

GBP/USD posts small gains above 1.2700, awaits fresh catalysts

GBP/USD holds small gains above 1.2700 in European trading on Tuesday. Investors await fresh catalysts, with several Federal Reserve speakers and BoE Governor Andrew set to speak. Tuesday's Fedspeak weighed on rate cut expectations and fuelled a fresh US Dollar advance. 

GBP/USD News

Gold price loses its recovery momentum amid renewed US Dollar demand

Gold price loses its recovery momentum amid renewed US Dollar demand

Gold price (XAU/USD) loses traction on Tuesday after reaching a record high earlier. The lack of fresh catalysts in a quiet session in terms of top-tier economic data might limit the precious metal’s upside.

Gold News

Shiba Inu price flashes buy signal, 25% rally likely Premium

Shiba Inu price flashes buy signal, 25% rally likely

Shiba Inu price has flipped bullish to the tune of the crypto market and breached key hurdles, showing signs of a potential rally. Investors looking to accumulate SHIB have a good opportunity to do so before the meme coin shoots up.

Read more

Three fundamentals for the week: UK inflation, Fed minutes and Flash PMIs stand out Premium

Three fundamentals for the week: UK inflation, Fed minutes and Flash PMIs stand out

Sell in May and go away? That market adage seems outdated in the face of new highs for stocks and Gold. Optimism depends on the easing from central banks – and some clues are due this week.

Read more

Majors

Cryptocurrencies

Signatures