Market Quick Take - June 24 2021 Market Quick Take - June 24 2021 Market Quick Take - June 24 2021

Market Quick Take - June 24 2021

Saxo Strategy Team

Summary:  US equities closed almost unchanged yesterday after a low-energy session and new all-time highs intraday for the Nasdaq 100 index. Trading ranges overnight in Asia were generally muted. Elsewhere, the US dollar stabilized late yesterday after the recent sell-off on another regional Fed president talking up rate hikes for 2022. Sterling is trading firmly ahead of the Bank of England meeting today in anticipation of more hawkish guidance.

What is our trading focus?

Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) – a lacklustre session yesterday, but the Nasdaq 100 has held the break to new all-time highs well so far and support is now perhaps the 14,000 level psychologically and the very tight rising channel as traders keep an eye on interest rates and wait for the incoming earnings season. The S&P 500 has yet to regain its all-time highs as relative weakness in value stocks is a drag on the broader market. 

Bitcoin (BITCOIN_XBTE:xome) and Ethereum (ETHEREUM_XBTE:xome). Cryptocurrencies haven’t gained much further upside energy after rejecting recent downside breaks of important support levels. Bitcoin topped out near 35k before dipping back below 33k this morning, while Ethereum hasn’t been able to consistently retake the 2,000 level, trading not far above 1,900 this morning.

EURUSD and GBPUSD the EURUSD consolidation remains a fairly tepid affair as the pair failed to pull back to the 1.2000 level yesterday, finding resistance near 1.1970 and with the weak close offering a technical hook for bearish involvement. GBPUSD was a bit more peppy on sterling strength in anticipation of today’s Bank of England meeting (more on that below) and the pair reached the key 1.4000 level before finding resistance – a pivotal level for any potentially hawkish message the BoE is set to deliver today.

JPY pairs – the JPY sell-off after the post-FOMC spike has now faded, setting up interesting resistance levels across the board in JPY crosses, including in USDJPY, where the move to a new cycle high above 111.00 yesterday failed to stick, although it would take a deeper cut to the downside to break the dominant chart feature of the current rising channel. Important coincident factors for the JPY are the direction in long safe haven yields.

Crude oil futures paired gains after hitting a fresh cycle high and overbought territory. The weekly US stock report showed supportive declines in both crude oil and gasoline stocks. Perhaps helping to cool prices was a comment from the Saudi energy minister saying OPEC has a role to play in “taming and containing” inflationary pressures. The OPEC+ group meets on July 1 to decide its production levels for August and beyond. With US shale production showing no sign of a revival, the group can through its decision send a signal whether it is seeking higher prices or stability at current levels.

The bond market will focus on the 7-year note auction today (IEF). This week’s 2- and 5-year auctions showed that demand for US Treasuries is falling following last week’s Federal Reserve's reversal on monetary policies. Investors are afraid to see a repeat of the selloff provoked by the 7-year note auction in February. The belly of the curve remains most vulnerable to inflation expectations and weaker demand at the auction may indicate that the investors fear a surprise from tomorrow PCE data.

What is going on?

Two regional Fed presidents spoke: one on “Team Transitory”, one wanting tapering and hikes sooner rather than later. Boston Fed president Eric Rosengren, not a voter this year at FOMC meetings, expects inflation to fall next year back toward the Fed’s “average” target of 2%. Elsewhere, the more hawkish Dallas Fed president Robert Kaplan (Also a non-voter) forecasts a rate hike for 2022 on higher inflation of 2.4% next year and the employment level dipping below 4%.

Czech central bank hiked the policy rate 25 bps as expected to 0.50%, and CZK gained sharply as one of the seven voters wanted a 50-bp hike. Central bank chief Rusnok said that “We are determined, without hesitation, to keep normalizing interest rates as needed.” He also said he could not rule out whether each of the remaining four bank meetings this year would bring a rate hike, rather hawkish guidance. EURCZK was 0.4% lower on the day in reaction.

European natural gas (GASNLBASEJUL21) trade at their highest level since 2008 on LNG Terminal maintenance, low stockpiles and reduced flows from Russia. With gas in storage hitting the lowest level for this time of year since 2009 the Dutch TTF gas contract for July delivery has breached €30 a megawatt-hour. Low deliveries of gas and lower wind-energy output has forced increased use of coal which in turn helps underpin carbon prices (EMISSIONSDEC21). In addition, the FT in an article speculates whether Russia has exacerbated the shortage by refraining from delivering extra gas to force up the price at a time of fraught relations between Russia and the West, with Crimea/Ukraine and not least the Nord Stream 2 pipeline being the key focus.

European banks (BNK:xpar) is down 5% from the highs in early June. European banks have rallied 132 percent since the vaccine announcement last year in November, but the rally has stopped for now with interest rates not moving and yield curves flattening following FOMC.

What are we watching next?

Bank of England meeting today – has the market priced it right? Sterling has risen recently in anticipation that the Bank of England will make the kind of hawkish shift the Fed made last week amidst a general global shift in the direction of withdrawing of accommodation, as one prominent EM central bank (Brazil) and two CEE central banks have already hiked rates.  Outgoing Bank of England Chief Economist Haldane is expected to dissent to today’s vote to not already hike rates now, but the more important focus will be on taper guidance and any wording indicating a pulling forward of the anticipated date of lift-off for the policy rate, currently priced around the middle of next year. Yesterday, the UK June composite PMI was a very strong 61.7, although this was slightly below the 62.5 anticipated and 62.9 in May.

Earnings this week. Yesterday, IHS Markit delivered Q2 revenue and EPS in line with expectations and increased its guidance for the fiscal year without big emotions from investors. This company is on a very steady trajectory again following a minor setback during the pandemic. Today, it is all about Nike (aft-mkt) and FedEx (aft-mkt), with big expectations around FedEx’s earnings with analysts expecting 24% y/y revenue growth and EBITDA margin expected to expand again following three quarters of declining EBITDA margin due to rising input costs. Analysts expect revenue at $11bn up 75% y/y from the lows during the shutdown last year. Given rising wage pressures at retail stores, rising commodity prices and logistics costs it will be worth watching gross and EBITDA margins in today’s earnings release.

  • Today: Nike, FedEx, Accenture
  • Friday: Paychex, CarMax

A raft of Fed speakers, but likely few takeaways? It is clear that there is considerable division among Fed members on the appropriate timing of tapering asset purchases and raising rates from the dot plot of Fed policy forecasts in last week’s FOMC minutes. We have an impressive number of regional Fed presidents out talking today, but their thoughts may elicit less reaction than economic data from here.

Economic Calendar Highlights for today (times GMT)

  • 0800 – Germany Jun. IFO Business Climate Survey
  • 1100 – UK Bank of England Announcement
  • 1230 – US May Advance Goods Trade Balance
  • 1230 – May Preliminary Durable Goods Orders
  • 1230 – US Weekly Initial Jobless Claims
  • 1300 – US Fed’s Barkin (voter) to speak
  • 1330 – US Fed’s Bostic (voter) and Harker (non-voter) to speak
  • 1430 – US Weekly Natural Gas Storage Change
  • 1500 – US Jun. Kansas City Fed
  • 1500 – US Fed’s Williams (voter) to speak
  • 1700 – US Fed’s Bullard (non-voter) to speak
  • 1700 – US Fed’s Kaplan (non-voter) to speak
  • 1800 – Mexico Central Bank Rate Announcement
  • 2000 – US Fed’s Barkin (voter) to speak

Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app:

Apple Sportify Soundcloud Stitcher


Saxo Capital Markets (Australia) Limited prepares and distributes information/research produced within the Saxo Bank Group for informational purposes only. In addition to the disclaimer below, if any general advice is provided, such advice does not take into account your individual objectives, financial situation or needs. You should consider the appropriateness of trading any financial instrument as trading can result in losses that exceed your initial investment. Please refer to our Analysis Disclaimer, and our Financial Services Guide and Product Disclosure Statement. All legal documentation and disclaimers can be found at

The Saxo Bank Group entities each provide execution-only service. Access and use of Saxo News & Research and any Saxo Bank Group website are subject to (i) the Terms of Use; (ii) the full Disclaimer; and (iii) the Risk Warning in addition (where relevant) to the terms governing the use of the website of a member of the Saxo Bank Group.

Saxo News & Research is provided for informational purposes, does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of our trading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. No Saxo Bank Group entity shall be liable for any losses that you may sustain as a result of any investment decision made in reliance on information on Saxo News & Research.

To the extent that any content is construed as investment research, such content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication.

None of the information contained here constitutes an offer to purchase or sell a financial instrument, or to make any investments.Saxo Capital Markets does not take into account your personal investment objectives or financial situation and makes no representation and assumes no liability as to the accuracy or completeness of the information nor for any loss arising from any investment made in reliance of this presentation. Any opinions made are subject to change and may be personal to the author. These may not necessarily reflect the opinion of Saxo Capital Markets or its affiliates.

Please read our disclaimers:
- Full Disclaimer (
- Analysis Disclaimer (
- Notification on Non-Independent Investment Research (

Saxo Capital Markets (Australia) Limited
Suite 1, Level 14, 9 Castlereagh St
Sydney NSW 2000

Contact Saxo

Select region


The Saxo trading platform has received numerous awards and recognition. For details of these awards and information on awards visit

Saxo Capital Markets (Australia) Limited ABN 32 110 128 286 AFSL 280372 (‘Saxo’ or ‘Saxo Capital Markets’) is a wholly owned subsidiary of Saxo Bank A/S, headquartered in Denmark. Please refer to our General Business Terms, Financial Services Guide, Product Disclosure Statement and Target Market Determination to consider whether acquiring or continuing to hold financial products is suitable for you, prior to opening an account and investing in a financial product.

Trading in financial instruments carries various risks, and is not suitable for all investors. Please seek expert advice, and always ensure that you fully understand these risks before trading. Saxo Capital Markets does not provide ‘personal’ financial product advice, any information available on this website is ‘general’ in nature and for informational purposes only. Saxo Capital Markets does not take into account an individual’s needs, objectives or financial situation. The Target Market Determination should assist you in determining whether any of the products or services we offer are likely to be consistent with your objectives, financial situation and needs.

Apple, iPad and iPhone are trademarks of Apple Inc., registered in the US and other countries. AppStore is a service mark of Apple Inc.

The information or the products and services referred to on this website may be accessed worldwide, however is only intended for distribution to and use by recipients located in countries where such use does not constitute a violation of applicable legislation or regulations. Products and Services offered on this website is not intended for residents of the United States and Japan.

Please click here to view our full disclaimer.