Morning Brew June 23 2023
Senior Relationship Manager
Summary: Streched markets hit hawkish central banks
Hawkish central banks weigh on risk sentiment and the USD gains in a volatile session. EURUSD briefly traded above 1.10 to fall to 1.0930, GBPUSD briefly hit 1.2850 after the hike by the BoE but receded to 1.2708 on recession fears. Interest Rates are front page news in the UK`s tabloids – not a good sign. USDJPY rose to 143.35, Gold and Silver 1915 and 22.33.
Comments by Powell yesterday that the Fed would remain Hawkish BUT would proceed cautiously supported equities initially. The Dow closed barely green, the S&P 500 at 0.37% positively and the Nasdaq gained app 1%. Volumes were way below average at 9.6 mio vs 11.4 mio traded shares.
Over night, Asian stocks fell and suffered the worst week of the year on Friday and oil fell on growth worries.
Today will be about digesting yesterdays rate decisions and trying to identify the next driver.
As of now, the hawkish trend seems to be intact, the Fed, ECB, BoE, SNB, the Bank of Canada and others are expected to kike at the next session.
Today we are expecting international PMI and next week will be fairly quiet in terms of top tier economic data. We are heading into Month, Quarter as well as half year end.
I believe sentiment will brake or break the day in stretched markets– be careful