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Asian equity markets traded mostly lower as market participants reacted to the tech-driven declines on Wall Street. Investors were also digesting a series of statements from the Federal Reserve and the release of hot UK CPI data, which added to the cautious sentiment. Additionally, risk appetite was constrained by key holiday closures, with markets across the Greater China region closed for the Dragon Boat Festival. The Nikkei 225 index traded with a negative bias, although the downside was limited by recent currency weakness. Furthermore, comments from Bank of Japan (BoJ) Board Member Noguchi echoed the dovish tone of the central bank, emphasizing the commitment to maintaining an accommodative policy. Noguchi highlighted the importance of ensuring sustainable wage growth by persisting with easy monetary policy.

Following recent higher-than-expected figures for both UK CPI inflation and wage growth, the market views a thirteenth consecutive interest rate increase by the Bank of England today as highly likely. In fact, considering yesterday's data indicating a significant rise in 'core' inflation and concerns about potential second-round price pressures, there has been speculation that the rate hike could be 50bps instead of the usual 25bps. It will be interesting to observe if the two policymakers who have previously voted against rate increases maintain their stance and if any members advocate for a larger hike. As the market has already priced in multiple interest rate hikes by the end of the year, potentially reaching close to 6%, the forward guidance provided today will be significant. Although this meeting does not include a press conference or updated forecasts by the Bank of England Governor, the press statement and meeting minutes will offer insights. While policymakers may state that future moves are contingent on data, market participants will be keen to detect any reaction to the interest rate trajectory that is currently anticipated.

Stateside, close attention will be given to the weekly jobless claims data, especially as recent reports suggest a possible easing of the tight labour market. Additionally, it is the second day of Federal Reserve Chair Powell's semi-annual testimony to Congress. Yesterday, his remarks mainly reiterated the key points from last week's monetary policy update.
 

CFTC Data As Of 16-06-23

• MM net spec USD short dipped in Jun 7-13 period, $IDX -0.75%
• EUR$ +0.94% in period, specs -6,599 contracts now +151,822
• $JPY +0.48% in period, specs +841 contracts now -103,976
• GBP$ +1.54% in period, specs -5,749 contracts now +6,735
• AUD$ +1.45%, specs -5,277 contracts now -61,745; $CAD -0.63% specs +1,661
• BTC -4.1% in period specs -26 contracts now long 743 contracts
• Positioning data pre-Fed, ECB, BoJ meetings, no surprises by c.banks
• Post-meetings Fed pause weighed on USD vs EUR, GBP; JPY tumbles on ultra-soft BoJ guidance(Source: Reuters)
   

FX Options Expiries For 10am New York Cut 

(1BLN+ represent larger expiries, more magnetic when trading within daily ATR)

• EUR/USD: 1.0900 (2.2BLN), 1.0990-1.1005 (1.2BLN), 1.1015 (284M)
• 1.1050 (583M)
• USD/CHF: 0.8900 (348M), 0.8950 (470M), 0.8990-0.9000 (739M)
• GBP/USD: 1.2560 (339M), 1.2595-1.2600 (503M)
• EUR/GBP: 0.8630 (645M)
• AUD/USD: 0.6675 (464M). NZD/USD: 0.6000 (523M). AUD/NZD: 1.1100 (1.4BLN)
• USD/CAD: 1.3100-15 (795M), 1.3200-10 (735M)
• USD/JPY: 141.00-10 (961M), 141.15-20 (541M) 142.00 (933M), 142.50 (909M)
   

Overnight News of Note

• Decision On Who Will Be Next RBA Governor Is Likely In July
• France, China See Room To Expand Trade Ties With Climate Focus
• Fed’s Powell: More Hikes Are Likely This Year To Fight Still-High Inflation
• Fed’s Bostic Favours Holding Rates Steady Through Year End
• Fed's Goolsbee Says Last Week's Rate Decision Was A 'Close Call'
• Fed Nominees Favour Tailoring Bank Rules, Vow To Cool Inflation
• BoC Minutes: To Gauge Need For Further Hikes Based On Data
• Traders Fully Price 4% Peak ECB Rate For First Time Since March
• Brazil Central Bank Holds Interest Rates But Softens Message
• Goldman Raises Japan Stock Targets, Citing Corporate Reforms
• Tesla Seen Staying As Top EV Seller In US Through 2026, Buoyed By Discounts
• Renault To Build New EV Plant At Its Korean Base In Busan
• Telecom Italia Sounds Out Buyers For Stake In Enterprise Unit
• US Curve Inversion Deepens To One Percentage Point After Powell

(Sourced from Bloomberg, Reuters and other reliable financial news outlets)
 

Technical & Trade Views

SP500 Bias: Intraday Bullish Above Bearish Below 4340

• Below 4330 opens 4300
• Primary support is 4300
• Primary objective is 4580
• 20 Day VWAP bullish, 5 Day VWAP bearish

(Click on image to enlarge)

EURUSD Intraday Bullish Above Bearsih Below 1.0920 - Target Hit, New Pattern Emerging

• Below 1.0880 opens 1.0830
• Primary support is 1.0666
• Primary objective is 1.1050
• 20 Day VWAP bullish, 5 Day VWAP bullish

(Click on image to enlarge)

GBPUSD Bias: Intraday Bullish Above Bearish Below 1.2750 

• Below 1.27 opens 1.26
• Primary support  is 1.2680
• Primary objective 1.2880
• 20 Day VWAP bullish, 5 Day VWAP bullish

(Click on image to enlarge)

USDJPY Bias: Bullish Above Bearish Below 141 

• Below 140.90 opens 140.30
• Primary support  is 139.50
• Primary objective is 143.49
• 20 Day VWAP bullish, 5 Day VWAP bullish

(Click on image to enlarge)

AUDUSD Bias:Intraday Bullish Above Bearish Below .6720

• Below .6720  opens .6680
• Primary support  is .6660
• Primary objective is .6917
• 20 Day VWAP bullish, 5 Day VWAP bearish

(Click on image to enlarge)

BTCUSD Intraday Bullish Above Bearish below 28500 Target Hit New Pattern Emerging

• Below 28000 opens 26900
• Primary resistance is 27400
• Primary objective is 31000
• 20 Day VWAP bullish, 5 Day VWAP bullish

(Click on image to enlarge)

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