North American News
Nasdaq ends an eight-week winning streak
- Nasdaq falls 1.3 on the week to end a run that started in late April
A big chunk of this week’s equity selling to quarter-end rebalancing flows and the front-running of those flows.
On the day:
- S&P 500 -29 points, or -0.8%, to 4395
- Nasdaq Comp -0.9%
- Russell 2000 -1.0%
- DJIA -0.6%
On the week:
- S&P 500 -1.3%
- Nasdaq Comp -1.4%
- Russell 2000 -3.0%
- DJIA -1.7%
US June flash S&P Global services PMI 54.1 vs 54.0 expected
- The manufacturing and services flash surveys from S&P Global
- Fifth consecutive improvement in services
- Prior was 54.9
- Manufacturing 46.3 vs 48.5 expected
- Composite 53.0 vs 54.3 prior
- Services new orders grew at a strong rate
Fed’s Mester doesn’t speak on monetary policy
- Comments from Mester at a Cleveland Fed conference on building communities in a challenging economic environment
Fed’s Daly: Risks over overtightening and undertightening are ‘about balanced’
- Comments from the San Francisco Fed President
- Two more rate hikes this year is a ‘very reasonable’ projection
- Two more hikes is only a projection, we don’t know for sure
- Prudent to slow the pace of hikes as we approach destination
- Says she strongly supported June decision to hold rates and watch the data
- Community contacts are worried housing has hit a bottom and that rents are reaccelerating
- Credit tightening so far is consistent with what would have been expected without March banking turmoil
- Inflation expectations and frequency and magnitude of prices changes are both on a downward trajectory
Fed’s Bostic: I expect jobless rate to rise from historically low level
- Comments from the Fed’s Bostic
- Credit risk is likely coming and real estate could pose a risk
- The banking sector is quite strong
- I’m not seeing elements of risk appearing in the economy
Commodities
Gold rebounds amid recession fears, slowing global economic growth
- Gold recovers, rising 0.69% to $1926.30, amid global recessionary fears and faltering US bond yields.
- A worldwide slowdown in business and manufacturing activity stokes investor concerns and drives a shift to safe assets.
- Market participants focus on Fed speeches for rate hike insights; current odds are 74.4% for a 25-bps hike in July.
Gold price recovers some ground after falling to new three-month lows of $1910.26 overnight, while US bond yields retreat after printing weekly highs, spurred by central bank tightening.Global data revealed the economic slowdown, sparking recessionary fears.The XAU/USD is trading at $1926.30, gains 0.69%.
Silver struggles to reclaim ground, and turns bearish below the 200-DMA
- Silver price sees a minor gain of 0.50% but fails to reclaim the May 26 daily low, resulting in a bearish outlook.
- The technical analysis shows support at the March 21 daily low of $22.14; breaking this could see a drop below the $22.00 figure.
- Potential resistance lies at the May 26 low-turned resistance at $22.68, with the 200-day EMA at $22.94 and $23.00 as the next challenges.
Silver price remains firm in the session but could not reclaim the May 26 daily low; previous support turned resistance and also below the 200-day Exponential Moving Average (EMA). Therefore, the XAG/USD turned bearish from a technical perspective. The XAG/USD is trading at $22.32, a gain of 0.50%.
Natural Gas breaks monthly highs on heatwave, Norwegian supply
- Natural Gas breaks to new highs for June amid hotter-than-average global temperatures, faltering confidence in supply, US Dollar correction.
- Prices have been climbing higher as hotter weather stoked demand for Gas to power air conditioning.
- Gas terminal closures and outages in Norway, Europe’s primary producer, further supported prices, as had a pullback in USD.
Natural Gas price has broken to new highs for the month of June on Friday despite macroeconomic data from major economies – especially the US – coming out lower than expected, raising concerns about global growth. A global heatwave which is seeing record-breaking temperatures in some parts and increased demand for Gas to power air conditioning coupled with a series of incidents at Norwegian Gas plants are the key factors behind the rally. A late-stage pullback by the US Dollar, perhaps catalysed by the weak US PMI data could be a further cause of Natural Gas’s sudden rally.
Oil claws back most of its losses but still finishes 35-cents lower to $69.16
- WTI crude oil fell as low as $67.35
Worries about the global economy continue to weigh on oil. Crude fell as low as $67.35 today in a test of the post-Saudi cut lows but the bulls made a stand it rebounded to close only modestly lower.
Still, it was the second day of selling third weekly decline in the past four weeks. A larger theme that weighed this week was increasing evidence that Iran’s exports are getting to market.
Baker Hughes rig count -6 at 546 unchanged @ 130 total
- The Baker Hughes rig count for the current week
- Oil rigs -6 at 546
- Nat Gas unchanged at 130
- Total rigs -5 at 682
EU News
European equity close: Five straight days of declines this week
- Closing changes for the main equity bourses in Europe
Closing changes for the day:
- Stoxx 600 -0.3%
- German DAX -1.0%
- FTSE 100 -0.6%
- French CAC -0.6%
- Italy MIB -0.8%
- Spain IBEX -1.0%
For the week:
- Stoxx 600 -2.9%
- German DAX -3.3%
- FTSE 100 -2.4%
- Italy MIB -2.4%
- Spain IBEX -2.4%
Eurozone June flash services PMI 52.4 vs 54.5 expected
- Latest data released by HCOB – 23 June 2023
- Prior 55.1
- Manufacturing PMI 43.6 vs 44.8 expected
- Prior 44.8
- Composite PMI 50.3 vs 52.5 expected
- Prior 52.8
Spain Q1 final GDP +0.6% vs +0.5% q/q prelim
- Latest data released by INE – 23 June 2023
- GDP +4.2% vs +3.8% y/y prelim
France June flash services PMI 48.0 vs 52.0 expected
- Latest data released by HCOB – 23 June 2023
- Prior 52.5
- Manufacturing PMI 45.5 vs 45.4 expected
- Prior 45.7
- Composite PMI 47.3 vs 51.0 expected
- Prior 51.2
Germany June flash services PMI 54.1 vs 56.2 expected
- Latest data released by HCOB – 23 June 2023
- Prior 57.2
- Manufacturing PMI 41.0 vs 43.5 expected
- Prior 43.2
- Composite PMI 50.8 vs 53.5 expected
- Prior 53.9
UK May retail sales +0.3% vs -0.2% m/m expected
- Latest data released by ONS – 23 June 2023
- Prior +0.5%
- Retail sales -2.1% vs -2.6% y/y expected
- Prior -3.0%; revised to -3.4%
- Retail sales (ex fuel, autos) +0.1% vs -0.3% m/m expected
- Prior +0.8%; revised to +0.7%
- Retail sales (ex fuel, autos) -1.7% vs -2.1% y/y expected
- Prior -2.6%; revised to -3.0%
UK June flash services PMI 53.7 vs 54.8 expected
- Latest data released by S&P Global – 23 June 2023
- Prior 55.2
- Manufacturing PMI 46.2 vs 46.8 expected
- Prior 47.1
- Composite PMI 52.8 vs 53.6 expected
- Prior 54.0
ECB’s de Cos: We will hike rates again in July, not possible to say what comes after that
- Remarks by ECB policymaker, Pablo Hernandez de Cos
- Core inflation is more resistant than expected
- We still have ground to cover
- We will raise interest rates again in July
- Not possible to say what we will do afterwards
June Belgian business sentiment -12.1 vs -9.2
- Sentiment falls in June
The measure of business sentiment from Belgium’s central bank fell to -12.1 from -9.2.
Other News
It is difficult to envisage an impending recession with VIX below 14 – SocGen
We may be heading into a ‘low-volatility regime’ in equities, according to economists at Société Générale.
Equities on the cusp of a ‘low-volatility-regime’?
While equities hitting new 52-week highs has been a pain trade for many investors, let’s not forget the role that lower volatility has played in adding to the discomfort. The fact remains that it is difficult (if not impossible) to envisage an impending recession with VIX below 14.
Our long-term fundamental volatility models highlight the risk of equity volatility dropping further from here and entering a multi-month period of low volatility.
Japan finance minister says firmly watching FX moves
- Remarks by Japan finance minister, Shunichi Suzuki
- Sharp currency movement is undesirable
- Currency rates should be set by the market, reflecting fundamentals
- Says does not want to comment on FX levels
ICYMI: UBS expecting rising demand, falling inventory to support oil over northern summer
A note from UBS argues of higher oil prices in the coming months.
Analysts at the bank cite:
- the seasonal rise in demand ahead
- and more visibility for larger falls in oil inventory
UBS point to OPEC+ crude oil output cuts cutting the cartel’s exports to the lowest in a year.
Cryptocurrency News
Bitcoin Price Surges Past $31,000 as IMF Acknowledges Unstoppable Momentum
- Bitcoin price rallied 5% on June 23, breaching $31,000 for the first time since June 2022.
- The move comes on the same day the IMF said Bitcoin is unstoppable, questioning the effectiveness of countries banning crypto.
- The climax comes at the close of a thematic week, with spot BTC ETF making headlines across crypto news sites.
Bitcoin (BTC) price is on with its explosive rally that began earlier in the week, reclaiming levels last seen over a year ago. This bullishness rides on the back of a spot BTC-themed week, with deep-pocketed institutional investors filing for approvals. The rally came just when market participants grew impatient with the prolonged bull market, inspiring hope for higher price targets.
USDC being trialed by German software giant SAP for cross-border payments, revival ahead?
- USDC is being touted as a solution to the cross-border payment hassle faced by mid-sized enterprises.
- The EU adopting MiCA has motivated companies in the bloc to adopt crypto and digital assets.
- If successful, cross-border usage of USDC would boost its supply in the market, which has fallen by over $16 billion since the beginning of the year.
USDC has had a rather difficult six months after losing its domination in the stablecoin space due to multiple reasons, including increasing regulator scrutiny and the March 2023 banking crisis. However, with the changing environment in the European Union regarding crypto acceptance, the Circle-issued stablecoin might have a shot at regaining its lost dominion of the crypto market.
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