FX News Today
- Treasury yields extended declines in a quiet and cautious Monday action.
- The front end and belly of the curve mostly led the way on safe haven flows and the FOMC’s more dovish than expected twist last Wednesday, continued to support.
- Equities were little changed after a narrow, range bound trade.
- Tensions with Iran continued to drive cash into the safety of Treasuries, especially after President Trump’s announcement that he was placing more sanctions against its supreme leader and other top Iran officials has closed the path to a diplomatic solution (on the Ayatollah Khamenei, personally).
- US futures are down -0.2-0.5% as traders await Powell’s speech today.
- The WTI future saw a high of $57.98 per barrel before pulling back slightly to a now $57.45.
- Wall Street was in a more wait-and-see mode on the geopolitical risks, and as global markets await the US-China trade talks at the G20 later in the week.
Charts of the Day
- EURUSD printed fresh 3-month highs just over 1.1411, up from 1.1380 lows at the open. The Euro moved to session highs after the weaker Dallas Fed index. The pairing ran into sellers at 1.1400, seeing a pullback to 1.1386 lows. Prospects for a July Fed rate cut continue to weigh on the Dollar, though soft EU data are likely to push the ECB toward further stimulus over the next few months, largely offsetting potential Fed policy easing. The March 20 high of 1.1448 is the next resistance level.
- Gold has printed five-plus year highs of $1,439.11, up from opening lows of $1,418.17. US/Iran tensions, along with potential for a Fed rate cut in July, and a weaker Dollar, have all combined to put a bid under gold prices. The contract can be expected to remain in buy-the-dip mode for the foreseeable future, and continue to benefit from safe-haven flows on any fresh clashes in the Mideast.
Main Macro Events Today
- NO OPEC Meeting in June –The dates of the separate OPEC ministerial meeting and of OPEC and its allies, known as OPEC+, have been changed to July 1-2, from June 25-26.
- CB Consumer Confidence (USD, GMT 14:00) – The Consumer Confidence is expected to slip to 133.5 in June from 134.1 in May, versus a 16-month low of 121.7 as recently as January and an 18-year high of 137.9 in October. Overall, confidence measures remain historically high.
- Fed’s Chair Powell speech (USD, GMT 17:00)
Support and Resistance levels
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