Sunday & Tuesday
Stronger than expected GDP and PPI data for the Japanese Yen surprised the market, reinforcing hawkish conviction for the BOJ.
Wednesday
Inflation data for the USD came out just as expected.
Thursday
PPI for the USD came out mixed; highlighting stronger PPI YoY while weaker Core PPI data.
Earlier in the morning was the ECB rate decision; they hiked to 2.4% from 2.1% as expected. Overall, the ECB raised its inflation projections across the forecast horizon (hawkish), seeing possible rate hike as soon as July (Bloomberg).
Tuesday June 16:
BoJ and RBA Rate decision. Forecast suggests a BoJ rate hike. The key focus will be on the BoJ's level of hawkishness and its guidance for future policy moves.
Wednesday June 17:
Fed Rate decision. First Kevin Warsh press conference. Will be very important to watch how he handles inflation questions to get more insight into forward guidance.
Thursday June 18:
SNB Rate decision, forecast at 0%, no change expected.
BoE Rate decision, no change expected at 3.8%.
Monday June 08:
Trump managed to stop strikes between Israel and Iran that started over the weekend.
Tuesday June 09:
“””US Army Apache helicopter goes down near the Strait of Hormuz.”””
US strikes Iran
“””#BOJ SET TO RAISE INTEREST RATE TO 1% AT JUNE MEETING: NIKKEI”””
Wednesday June 10:
Trump threatens to strike Iran Very hard
Thursday June 11:
Trump says a deal will soon be signed
Friday June 12:
Both sides do not seem to agree on the Hormuz question
Saturday June 13:
Sunday June 14:
A deal has been reached and is expected to be signed on Friday June 19, in Switzerland.
Deal is still expected to be signed on Friday:
Risk-on:
Oil lower
Gold higher
SPX, NQ higher
DXY lower
US Yields should drop
Complications:
Israel & Hezbollah continue strikes against each other:
It may or may not compromise the deal (push it back for later).
Rumors or Trump pressure about the future status of the Strait of Hormuz:
Optimism should continues, closer to the end of the war and back to commercial oil vessel passing through Hormuz.
Strikes resume:
Risk-off
Before the deal, I was interested in USDCAD to the upside:
Yield spread was continuing to deepens.
Inflation, both headline and core, is higher in the U.S. than in Canada. Also, the fact that the labour market is weaker in Canada leads me to believe that the Bank of Canada will not be able to hike as much as the Fed could.
1d
1h
1d
1h
Now, with the deal news creating a risk-on environment, it could easily move back toward the gray box, which aligns with the daily trendline, the 200MA, and the previous support level. Until Wednesday, the market might also wait until the Fed press conference to get more insight into forward guidance.
