Forex News

Oil news, and with wider implications on who the Saudis now consider their partners:in private, Crown Prince Mohammed bin Salman threatened to fundamentally alter the decades-old U.S.-Saudi relationship and impose significant economic costs on the United States if it retaliated against the oil cuts, according to a classified document obtained by The Washington PostWashington Post article. Link, gated This article was written by Eamonn Sheridan at www.forexlive.com.

Not forex related but big news nevertheless. Not unexpected news though. Former President Trump says he is being indicted in classified documents probe. His lawyers have received the paperwork. Trump has been summoned to appear in a Miami court on Tuesdayhe has been indicted on federal charges re 7 counts regarding stolen classified documents--The US justice system operates with a presumption of innocence until proven guilty. Good luck to the former Prez. This article was written by Eamonn Sheridan at www.forexlive.com.

Due at 0130 GMT, which is 9.30pm US Eastern time:A preview via one of Australia's 'big four' banks, the Commonwealth Bank of Australia. Australian analysts keep a keen eye on Chinese economic developments. Low official inflation data from is no hurdle to further stimulus should authorities go down that path.CBA snippet:We estimate headline CPI picked up marginally in May because of higher food prices. But a high year-ago base and soft demand suggest downside risks. PPI deflation likely deepened because of weaker commodity prices and weaker manufacturing activity. This article was written by Eamonn Sheridan at www.forexlive.com.

A note via JP Morgan on the US banking crisis and its lack of spillover into Europe. I thought this was hashed out already? Maybe not. Anyway JPM says stresses due to the regional banking crisis in the US is unlikely to affect the Euro zoneEuropean banks haven't yet experienced any major negative effects from the liquidity problem that hit the US, citing:Euro zone banks have “stickier deposits” Euro zone banks have smaller downside risk for “unrecognized market-to-market losses.”Euro area banks, while less profitable than banks in the US, score more highly "on several measures of solvency, liquidity and funding stability" This article was written by Eamonn Sheridan at www.forexlive.com.

An analyst at BoA says that market sentiment is overall negative (this is despite the S&P500 heading back into a bull market Thursday!) but that even so many stocks are sitting at high valuation levels:“Stocks do trade at statistically rich levels on most measures. But where one might expect multiples to expand with inflows and compress with outflows, the correlation between equity flows and valuations is effectively zero”And notes, (ps this is of relevance to both day traders and longer-term traders): valuation on normalized earnings may have “strong explanatory power” on long-term returns, but low predictive power over near-term returnsYep, day traders - continue to fire up your tech analysis, in whatever format you use. And for the longer-term folks, keep at the fundamentals. There is something for everyone in this market, regardless of which church you are in! This article was written by Eamonn Sheridan at www.forexlive.com.

The major US stock indices are closing higher with the NASDAQ index leading the way.A snapshot of the closing levels shows:Dow industrial average rose 168.59 points or 0.50% at 33833.62S&P index rose 26.41 points or 0.62% at 4293.92NASDAQ index rose 133.62 points or 1.02% at 13238.51Looking at the small-cap Russell index, it was not so fortunate with a decline of -7.66 points or -0.41% at 1880.77.The gains in the NASDAQ were helped by some of the AI stocks:Nvidia rose $10.35 or 2.76% at $385.10Adobe which reports earnings on June 15 rose $20.71 or 4.95% to $439.03Amazon, which is now being supported from the perspective of its AWS component, rose $2.98 or 2.46% to $124.15Tesla shares rose for the 10th consecutive day taking the price from a low close on May 24 of $182.90, to a close today of $234.86 (up 28.9%).The S&P index reached a high of 4298.01. That was just short of the year high of 4299.28 and the highest level going back to August 2022 This article was written by Greg Michalowski at www.forexlive.com.

Bank of Canada's Beaudry: Strong household spending and high inflation led to rate hikeUS initial jobless claims for the current week 261K vs 235K estimateOil prices take a dive on report that US and Iran near interim nuclear dealWhite House says report on Iran oil deal is falseSNB's Jordan: Inflation is more-persistent than we thoughtSEC Gensler: Crypto sec. issuers need to register investment contracts or meet exemptionsUS investor sentiment rises sharply and is above average for the first time since FebruaryAtlanta Fed GDPNow remains unchanged at 2.2%Federal Reserve reports first-quarter Household net worth rises by $3 trillionIMF urges US to stay the course on fighting inflationUS April wholesale sales +0.2% vs +0.4% expectedEIA weekly natural gas inventories +104B vs +113B expectedCitigroup dismantles CitiFX team - reportMarkets:Gold up $24 to $1964US 10-year yields down 7 bps to 3.71%WTI crude oil down $1.44 to $71.09S&P 500 up 27 points to 4294, or +0.6%NZD leads, USD lagsThe US dollar has been on a yo-yo this week but at least there was some fundamental backing today. The jump in initial jobless claims was the highest reading since 2021 and, though it's only one data point, the market is taking it as a sign of a slowing US economy and peak fed funds. The odds of a 25 bps hike next week are down to 25%.The euro and pound made particular headway against the dollar in North American trade as the euro stretched to a two-week high of 1.0761 from 1.0700. Cable rose 80 pips to 1.2560, which is a three-week high.The antipodeans were also strong but the gains against the dollar were just enough to return them to the peak levels following the RBA rate hike. CAD wasn't able to take advantage of the weaker US dollar and is only marginally above where it was before the BOC hike. A big reason for that is that oil plunged on the prospect of 1 mbpd of Iranian exports coming to the market. That story was denied but there's enough smoke to leave traders worried about fire, and for oil to fall 2%. CAD also underperformed alongside MXN on the idea of US-led continental weakness. Bonds were back in the spotlight as well as Treasury yields fell across the curve. That weighed on USD/JPY, lowering the pair 120 pips to 138.90, which is the lowest this week. This article was written by Adam Button at www.forexlive.com.

On Thursday in China were rate cuts:ForexLive Asia-Pacific FX news wrap: Chinese bank rate cutsInflation rates are no impediment to policy easing in China if the PBOC choose that path. indeed the cuts yesterday rekindled speculation of further easing:Chinese media speculate on a loan prime rate cut after banks reduced deposit ratesToday we get the latest official CPI and PPI readings. These are expected to show very subdued inflation at both levels. There is often discontent at the veracity of official Chinese data. This is the subject of a whole other discussion though. This snapshot from the ForexLive economic data calendar, access it here. The times in the left-most column are GMT. The numbers in the right-most column are the 'prior' (previous month/quarter as the case may be) result. The number in the column next to that, where there is a number, is the consensus median expected. This article was written by Eamonn Sheridan at www.forexlive.com.