The USD continued its run to the upside after the more hawkish Fed yesterday. The gains in the greenback were led by gains versus the GBP (+0.68%), the CHF (+0.56%) and the JPY (+0.47%).
The BOE and the SNB both kept rates unchanged. For the Bank of England, although the skew is toward higher rates, the central bank seems to be on hold for the foreseeable future as risks of slower growth balances things out a bit versus inflation. For the SNB, they indicated that intervention is not out of the question against the strong CHF.
The USDJPY started to step higher after breaking above the 2026 high at 160.717 and squeezed higher as the price continued away from the 160.00 level and move to and through 161.00 instead. Anxiety about intervention reared its ugly head once the price extended up to 161.81 just about 11 or 12 pips short of the highest level going back to 2024. The price quickly move down to a low of 160.887 but then bounced back higher and is trading near 161.40 heading into the end of day.
Traders can expect more anxiety going forward, but the buyers are still more in control as long at the old high for the year at 160.717 holds support. Move below it and staying below is now needed to give the sellers some control from a technical perspective back.
US stocks after falling yesterday, recovered nicely today help by the chip stocks. The trading week for stocks ends today due to the Juneteenth holiday tomorrow. For the week, the major indices closed higher:
- Dow industrial average +0.14%.
- S&P index +1.08%
- NASDAQ index +1.91%
- Russell 2000 + 2.12%
The US debt market will also be closed tomorrow. Yields in the short end edged higher today, while the yields in the longer end fell as the yield flattening continues.
- 2 year yield 4.1809%, +1.8 basis points
- 5 year 4.234%, +5.2 basis points
- 10 year 4.457%, -5.8 basis points
- 30 year 4.899%, -2.7 basis points
For the week, the
- 2 year yield is up around 10.0 basis points.
- 10 year yield is down -2.6 basis points.
Fundamentally:
- US initial jobless claims came in as expected at 226K vs 225K estimate
- Philly Fed regional index was also near expectation at 10.3 vs 10.0 estimate. .
The U.S.-Iran Memorandum of Understanding was released/leaked.
It showed a 14-point framework designed to end hostilities, reopen trade and energy flows, and provide a path toward a broader peace and nuclear agreement. The deal calls for an immediate halt to military operations, a reopening of the Strait of Hormuz with safe commercial passage, and the removal of the U.S. naval blockade. Both sides have agreed to negotiate a final agreement within 60 days. Iran reaffirmed that it will not develop nuclear weapons and will work with international inspectors on its nuclear program, while the U.S. pledged sanctions relief, access to frozen Iranian assets, and support for a reconstruction and economic development package worth at least $300 billion. The agreement also allows Iranian oil exports to resume, establishes a monitoring mechanism for compliance, and envisions a final deal that would be backed by a binding U.N. Security Council resolution. Markets have viewed the agreement as a major de-escalation event, helping ease concerns over oil supply disruptions and broader regional instability
investinglive.com