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On Thursday, Asian stocks surged, and bond yields declined as investors assessed the impact of moderating U.S. inflation in contrast to the Federal Reserve's more aggressive stance. Japanese stocks lagged behind, and the yen slightly weakened against the dollar as the Bank of Japan commenced its two-day policy meeting.

During the U.S. session, Wall Street experienced a strong rally, with the dollar and Treasury yields falling sharply. This was in response to the CPI report, which revealed that core prices had grown at their slowest annual pace in over three years last month. Investors seem to believe that despite the Fed's rate outlook, the mild U.S. inflation will lead to gains in Asian equities, and possibly in Europe as well. The initial surprise at the projection of only one U.S. rate cut this year, despite a very low CPI reading, was lessened by Fed Chair Jay Powell's remarks that many officials were undecided about a second rate cut and had only added an extra one for 2025. With the focus still on data dependence, the U.S. producer price readings later today  will be closely watched. Following the conclusion of the Fed meeting, policymakers will resume speaking engagements, with New York Fed President John Williams starting off by moderating a discussion with Treasury Secretary Janet Yellen at an event hosted by the Economic Club of New York. Williams, like Powell, believes that policy is in a good position to steadily bring down inflation to the target level.

European releases include Spanish inflation data and eurozone industrial production. Meanwhile, political drama continues in Europe, with Eric Ciotti claiming he is still the leader of France's Republicans despite being ousted for seeking a deal with the far right. President Emmanuel Macron also faced veiled criticism from his Renaissance party, with his former prime minister and potential successor Edouard Philippe expressing doubts about the president running a legislative campaign.
 

Overnight Newswire Updates of Note

• Fed Projects Just One Cut This Year Despite Mild Inflation Report
• US Scrambling To Stop Israel-Hezbollah War Amid Ceasefire Push
• BoJ To Weigh Bond Buying As Investors Seek Hints For July Hike
• Australian Unemployment Falls As Economy Keeps Adding Jobs
• Bank Of Canada Head Says Can Still Diverge From Fed On Rates
• UK Housing Market Loses Momentum As Rate Cut Hopes Shrink
• ECB’s Nagel Says Euro-Zone Core Inflation Is ‘Still Very Sticky’
• Banxico Says It Can Step In If Peso Volatility Becomes Extreme
• OPEC+ Unlikely To Up Oil Output In 2024, Energy Aspects Says
• Boeing To Face Enhanced FAA Scrutiny For ‘Foreseeable Future’
• Broadcom Gains After AI Computing Demand Fuels Sales Growth

(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: 1.0740-50 (1.8BLN), 1.0760-70 (1.7BLN), 1.0775-80 (3.7BLN)
• 1.0795-1.0810 (2.5BLN), 1.0825-30 (643M), 1.0835-40 (1.3BLN)
• 1.0845-50 (1BLN)
• USD/CHF: 0.8900 (705M), 0.8950 (1.3BLN), 0.9000 (849M)
• EUR/CHF: 0.9660 (289M), 0.9675 (610M), 0.9825 (519M)
• GBP/USD: 1.2700 (494M), 1.2750 (594M), 1.2775 (254M), 1.2795-1.2800 (274M)
• AUD/USD: 0.6630 (1BLN), 0.6650 (1.3BLN), 0.6690-0.6700 (670M), 0.6750 (451M)
• NZD/USD: 0.6170 (340M)
• USD/CAD: 1.3670-75 (1.7BLN), 1.3700 (1BLN), 1.3750 (1.5BLN), 1.3775 (725M)
• USD/JPY: 156.00 (1.4BLN), 156.20-25 (816M), 156.45-55 (716M), 156.80 (703M) 158.00-10 (1.2BLN)

CFTC Data As Of 07/06/24

• Bitcoin net short position is -1,119 contracts
• Swiss Franc posts net short position of -45,763 contracts
• British pound net long position is 43,210 contracts
• Euro net long position is 67,870 contracts
• Japanese yen net short position is -132,101 contracts
• Equity fund managers cut S&P 500 CME net long position by 23,186 contracts to 954,821
• Equity fund speculators increase S&P 500 CME net short position by 2,269 contracts to 332,326
• Gold NC Net Positions up to $237.3K from previous $236.6K

Technical & Trade Views

SP500 Bullish Above Bearish Below 5414

• Daily VWAP bullish
• Weekly VWAP bullish 5319
• Below 5410 opens 5390
• Primary support 5370
• Primary objective is 5403 TARGET ACHIEVED NEW PATTERN EMERGING

(Click on image to enlarge)

EURUSD Bullish Above Bearish Below 1.08

• Daily VWAP bearish
• Weekly VWAP bearish 1.0830
• Above 1.880 opens 1.0940
• Primary resistance 1.0981
• Primary objective is 1.0650

(Click on image to enlarge)

GBPUSD Bullish Above Bearish Below 1.2760

• Daily VWAP bullish
• Weekly VWAP bearish 1.2720
• Below 1.2740 opens 1.2690
• Primary support  is 1.2670
• Primary objective 1.2850 TARGET ACHIEVED NEW PATTERN EMERGING

(Click on image to enlarge)

USDJPY Bullish Above Bearish Below 156

• Daily VWAP bullish
• Weekly VWAP bullish 156.60
• Below 155.30 opens 154.50
• Primary support 152
• Primary objective is 160

(Click on image to enlarge)

XAUUSD Bullish Above Bearish Below 2320

• Daily VWAP bearish
• Weekly VWAP bearish 2355
• Above 2365 opens 2390
• Primary support 2300
• Primary objective is 2262

(Click on image to enlarge)

BTCUSD Bullish Above Bearish below 70000

• Daily VWAP bearish
• Weekly VWAP bearish 68015
• Below 66300 opens 64500
• Primary support is 65000
• Primary objective is 78200

(Click on image to enlarge)

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