A look at the day ahead in U.S. and global markets from Mike Dolan
Any investor trepidation about a slowing U.S. economy is once again being offset by renewed interest rate cut hopes – seeing the third day in row that Wall St stocks have turned around early losses to end higher by the close.
USDCAD 1.3682
BoC is “looking for evidence that momentum is sustained”
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Economists Lean Toward Bank of Canada Interest Rate Cut on Wednesday Canada’s central bank could be the first among G-7 authorities to begin policy easing after aggressive rate increases to curb inflation By Paul Vieira
Canada’s central bank could be the first among G-7 authorities to begin policy easing after aggressive rate increases to curb inflation
June 4, 2024 8:00 am ET|WSJ Pro
OTTAWA—Most economists expect the Bank of Canada on Wednesday to cut its main interest rate for the first time in four years, as data point to a monthslong slowdown in inflation, a cooling in labor-market activity and lackluster growth.
Eleven of 15 economists surveyed by The Wall Street Journal predict the Bank of Canada will cut its target for the overnight rate by a quarter-point, to 4.75%. The other four said central bank officials might wait to cut until its late July decision, to ensure additional data provide comfort that inflation is heading toward its target of 2%. Canada’s central bank sets interest-rate policy to achieve and maintain 2% inflation.
EURUSD 4 HOUR CHART – WAITING FOR THE ECB
EURUSD seems to be in a holding pattern waiting for Thursday’s ECB decision.
Chart show momentum to the upside but consolidating. A breal of 1.0858 would suggest some risk on the downside BUT only a break of 1.0827 would suggest the high is in for now. Otherwise, trend stays intact.
BTC DAILY CHART – 70000
BTC has been flying under the radar lately but as this Amazing Trader chart shows it has been in a consolidation but also slowly building momentum to the upside.
Key chart levels are clear:
‘
If 70K can hold as support there is only one obstacle to the record high.
If 70K fails to hold, it is back to flying under the radar.
USDJPY 4 HOUR CHART – JPY GOES FROM OVERPERFORMER TO UNDERPERFORMER
The failure to sustain a move below 155 has seen a pop in USDJPY and JPY weaken on crosses
Looking at this chart, the risk is still on the downside as long as it stays below 156.49
Using FIBOS:
156.35 = 61.8% of 157.47-154.53
156.50 = 61.8 pf 157.71-154.53
So if I had to choose two levels to watch it would be
156.50 (above would break current momentum)
155.00 (no change to my view as the bias setter)
I got this off the web
As of June 3, 2024, the Citigroup Economic Surprise Index (CESI) for the United States was -8.90. The CESI is the difference between official economic results and forecasts, and a sum above zero indicates that economic performance is generally better than expected. The CESI increases as the economy recovers, but decreases quickly as the economy declines
EURO 1.0876
Here is one good example why one should be selective and discerning of the news source
E.C.B. Is Likely to Leapfrog the Fed on Interest Rate Cuts – New York Times
With eurozone inflation falling, the European Central Bank has signaled it is ready to lower rates this week, diverging from the U.S. Federal Reserve.
By Eshe Nelson
Jun 05, 2024 04:00 AM
European Central Bank officials are expected to cut interest rates this week for the first time in more than five years, drawing a line under the worst of the eurozone’s inflation crisis and easing the pressure on the region’s weak economy.
… blablabla
EYE on yellen
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StreetInsider
Yellen says bill issuance not aimed at ‘sugar high’
By David Lawder. WASHINGTON (Reuters) – U.S. Treasury Secretary Janet Yellen on Tuesday rejected suggestions by Republican senators that the Treasury is deliberately increasing issuance of short-term Treasury bills at higher interest rates to try to stimulate the economy ahead of the November presidential election.
Yellen told a U.S. Senate subcommittee hearing that Treasury’s mix of debt issuance, despite a higher share of short-term bills since the COVID-19 pandemic, is in line with historical norms and with the advice of market participants in the Treasury Borrowing Advisory Committee.
“First of all, let me say that we never time the market. A tenet of Treasury debt management is that issuance should be regular and predictable, and that’s appropriate over time,” Yellen
Forexlive
Treasury Secretary Yellen:Treasury never tries to time market in debt management
June 5 (Reuters) – A look at the day ahead in Asian markets.
Investor sentiment is fragile as Asian markets reach the mid-point of the week, with bubbling angst and political volatility across the emerging world compounding deepening concern over U.S. and global economic growth.
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