Daily Market Outlook – Tuesday, June 4


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 Asian stock markets experienced a downturn following the release of a weaker-than-expected US ISM manufacturing survey on Monday, reversing the prior market dynamic where the market perceived bad news as good news for market sentiment as it prompted the markets to believe that the Fed would step in with rate cuts, recently we are witnessing a reversal of this response. This survey’s results have cast a shadow over the market’s risk appetite, fueling worries about the US economy’s deceleration. Moreover, there’s an anticipation that the Federal Reserve might maintain elevated interest rates to effectively combat inflation. While equity markets are uncertain about the news, the bond market shows a clear decrease in yields. The likelihood of a September rate cut has increased from 50:50 to 60:40, according to the CME Group’s FedWatch Tool.Investors are setting their sights on the upcoming ECB monetary policy announcement and the US employment data, expected on Thursday and Friday, respectively. The British Retail Consortium disclosed its informal retail sales data for May overnight, indicating a recovery after April’s sales were dampened by inclement weather. The figures showed a modest 0.4% increase year-over-year, a rebound from April’s 4.4% decline, yet still falling short of projections. This aligns with the recent CBI distributive trades survey, which also noted improved sales in May. No additional UK economic data is slated for release today.In the Eurozone, the absence of significant data releases today means there’s little chance of altering expectations for an ECB rate reduction this Thursday. However, today’s German unemployment report is likely to garner interest. The consensus is that jobless claims for May increased by 7,000, with the unemployment rate predicted to hold steady at 5.9% for the fifth consecutive month, following a rise throughout 2022 and 2023. Given that wage growth indicators are still relatively high historically, there may be a cautious approach to further ECB rate reductions later this year.Sateside, the spotlight will be on this afternoon’s factory orders and the JOLTS report. Factory orders are projected to have seen a 0.6% uptick in April, largely inferred from durable goods data. The JOLTS report is anticipated to provide insights into whether there’s a cooling off in labor demand.
 Overnight Newswire Updates of Note

  • BRC & Barclays Say Wet Weather Keeps Cloud Over UK Spending In May
  • Sunak And Starmer Set To Clash In First UK Election Leaders’ Debate
  • BoJ’s Ueda: Will Adjust Degree Of Support If Inflation Moves As Expected
  • Japan’s Govt To Warn Of Weak Yen Pain In Policy Roadmap, Draft Shows
  • Australian Consumer Confidence, Inflation Expectations Nudge Higher
  • JPMorgan Sees Ample Demand For Growth In Treasury Bill Supply
  • Oil Pushes Lower As OPEC+ Plan Spurs Concerns About Ample Supply
  • E*Trade Considers Kicking Meme-Stock Leader Keith Gill Off Platform
  • Maersk Lifts Guidance Again On Surging Freight Rates
  • Netanyahu Signals Openness To Cease-Fire But Wants Option To Resume
  • (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: 1.0805-10 (975M), 1.0850-60 (755M), 1.0870-80 (1BLN)
  • 1.0890-00 (1.64BLN), 1.0915-25 (581M)
  • USD/CHF: 0.9090-00 (1.15BLN)
  • EUR/CHF: 0.9650 (401M), 0.9800 (400M), 0.9925 (532M)
  • EUR/SEK: 11.6800 (425M). EUR/GBP: 0.8500 (793M)
  • GBP/USD: 1.2680 (322M), 1.2690-05 (560M)
  • AUD/USD: 0.6545-50 (951M), 0.6650 (302M), 0.6670-75 (560M)
  • 0.6690 (279M)
  • USD/JPY: 155.00 (523M), 155.50 (220M), 155.75 (251M)
  • 156.40-50 (635M), 157.00 (372M)
  • USD/ZAR: 18.1600 (335M), 18.1900 (308M), 18.6850 (234M)
     
  • CFTC Data As Of 31/05/24

  • Japanese yen net short position is -156,039 contracts
  • Euro net long position is 57,572 contracts 
  • Swiss franc posts net short position of 44,366 contracts
  • British pound net long position is 25,402 contracts
  • Bitcoin net short position is -756 contracts
  • Equity fund managers raise S&P 500 CME net long position by 31.431 contracts to 978,007
  • Equity fund speculators increase S&P 500 CME net short position by 12,145 contracts to 330,057
  • Gold NC Net Positions increased to $236.6K from previous $229.8K
     
  • Technical & Trade ViewsSP500 Bullish Above Bearish Below 5303

  • Daily VWAP bullish
  • Weekly VWAP bullish
  • Above 5310 opens 5379
  • Primary resistance 5303
  • Primary objective is 5146
  • EURUSD Bullish Above Bearish Below 1.0860

  • Daily VWAP bullish
  • Weekly VWAP bullish
  • Above 1.880 opens 1.0940
  • Primary resistance 1.0981
  • Primary objective is 1.0550
  • GBPUSD Bullish Above Bearish Below 1.2750

  • Daily VWAP bullish
  • Weekly VWAP bullish
  • Below 1.2700 opens 1.2640
  • Primary support  is 1.2590
  • Primary objective 1.2850
  • USDJPY Bullish Above Bearish Below 156

  • Daily VWAP bearish
  • Weekly VWAP bullish
  • Below 156 opens 154.50
  • Primary support 152
  • Primary objective is 165
  • XAUUSD Bullish Above Bearish Below 2360

  • Daily VWAP bearish
  • Weekly VWAP bearish
  • Above 2365 opens 2390
  • Primary support 2300
  • Primary objective is 2239 Below 2300
  • BTCUSD Bullish Above Bearish below 67000

  • Daily VWAP bearish
  • Weekly VWAP bullish
  • Below 67000 opens 65500
  • Primary support is 65000
  • Primary objective is 73400
  • More By This Author:FTSE Swoons On The First Trading Day Of JuneDaily Market Outlook – Monday, June 3FTSE Heads For A Hat-Trick Of Monthly Gains

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