EUR/USD. June 6th. Traders calmly await ECB decisions

On Wednesday, the EUR/USD pair rebounded from the corrective level of 76.4%–1.0892, a slight decline, and today—a new return to this level and a new rebound. Trader activity yesterday was quite low, but it may sharply increase today. The decline in quotes may continue towards the Fibonacci level of 61.8%–1.0837. Consolidating the pair's rate below the ascending trend corridor may end the bulls' dominance.

The wave situation remains clear. The last completed upward wave did not break the peak of the previous wave, and the last downward wave broke the low from May 23, but only by a few pips. Thus, we got the first sign of a trend change from "bullish" to "bearish," but it soon became clear that we would not see or get any downward reversal. The next upward wave then broke the peaks of the previous two waves. Therefore, for a prolonged decline in the euro, we must now wait for a new sign of a trend change. Such a sign could be close to 1.0785 or below the ascending corridor.

The information background on Wednesday again did not support bear traders as they would have liked. Currently, the European currency is moderately declining, but soon, the results of the ECB meeting will be known, and ECB President Christine Lagarde will speak in half an hour. The rate cut is already priced into the EUR/USD pair, but it is possible that the regulator will not soften monetary policy today. I do not rule out such an option. If rates are not lowered today, then bull traders will again go on the offensive. If Christine Lagarde adheres to "hawkish" rhetoric today, it will also support the euro. And what could be "hawkish" rhetoric? Lagarde may say that the next rate cut will not happen soon and that ensuring the continuation of the inflation decline is necessary.

On the 4-hour chart, the pair rebounded from the Fibonacci level of 50.0%–1.0794 and reversed in favor of the European currency. A new "bullish" trend line has formed, so the upward process may continue toward the next corrective level of 23.6%–1.0977. Now, declines in the European currency can be expected after the quotes are consolidated below the trend line. No emerging divergences were observed today for any indicator.
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Wall Street Sliding: S&P 500, Nasdaq Fall Ahead of Jobs Data

The S&P 500 and Nasdaq Composite ended Thursday with small losses ahead of a major jobs report, retreating from record highs hit the day before. The Dow, however, edged up slightly.

The S&P 500 and Nasdaq started the day higher and hit intraday records, but then retreated as tech stocks slid.

Utilities and industrials also contributed to the S&P 500's decline, with consumer discretionary and energy leading the gains.

Nvidia shares fell 1.1%, falling to third place in the world's most valuable companies, behind Apple, which regained the second spot.

Investors are eyeing a key U.S. nonfarm payrolls report on Friday. The latest weekly jobless claims report points to a softening labor market that could allow the Federal Reserve to begin cutting interest rates. The European Central Bank cut its interest rate for the first time since 2019.

The Dow Jones Industrial Average gained 78.84 points, or 0.20%, to 38,886.17. The S&P 500 lost 1.07 points, or 0.02%, to 5,352.96, while the Nasdaq Composite fell 14.78 points, or 0.09%, to 17,173.12.

Among the Dow Jones components, Salesforce Inc. was the top gainer, up 6.23 points (2.63%) to close at 242.76. Amazon.com Inc. was up 3.72 points (2.05%) to close at 185.00.

Nike Inc. was up 1.40 points (1.48%) to close at 95.72.

Intel Corporation was the top loser, down 0.36 points (1.17%) to 30.42. 3M Company shares added 0.84 points (0.85%) to close at 98.22, while Goldman Sachs Group Inc shares fell 3.58 points (0.78%) to end at 458.10.

Among the S&P 500 index's top gainers were Illumina Inc shares, which rose 7.42% to close at 114.72. PayPal Holdings Inc shares rose 5.49% to close at 67.02, while MarketAxess Holdings Inc shares increased 4.86% to end at 205.97.

NRG Energy Inc shares showed the biggest decline, losing 4.56% to close at 77.83. Hubbell Inc shares fell 4.11% to end at 365.94. Eaton Corporation PLC fell 4.02% to 313.46.

The biggest gainers on the NASDAQ Composite were Virax Biolabs Group Ltd, up 85.85% to 1.97. SilverSun Technologies Inc rose 68.61% to close at 220.00, while Fibrobiologics Inc rose 53.88% to 10.31.

Cue Health Inc was the worst performer, down 79.95% to 0.01. Plutonian Acquisition Corp fell 58.10% to close at 2.43. Actelis Networks Inc fell 47.04% to 1.97.

The rise of Nvidia and other AI-related stocks has been a key factor in supporting Wall Street's rally this year. The chipmaker has contributed significantly to the S&P 500's gain of more than 12% for the year.

Traders are pricing in a 68% chance of a rate cut in September, according to CME's FedWatch tool, and are pricing in two rate cuts this year, according to LSEG data. Forecasters polled by Reuters also expect two rate cuts.

"We're in a period of uncertainty between now and tomorrow," said Thomas Hayes, chairman of Great Hill Capital in New York. "But overall, we're seeing the beginning of a global, coordinated easing policy from central banks in the West, with the exception of Japan, which is tightening," he added.

GameStop shares jumped 47% after a popular online influencer known as "Roaring Kitty" announced on YouTube that she would be livestreaming on Friday.

Lululemon Athletica shares rose 4.8% after the company beat first-quarter earnings and revenue estimates.

U.S.-listed shares of Chinese electric vehicle maker NIO (9866.HK) fell 6.8% after reporting a quarterly net loss.

Five Below shares fell 10.6% after the discount store operator lowered its full-year net sales forecast.

Advancing stocks outnumbered declining stocks on the NYSE by a 1.05-to-1 ratio. On the Nasdaq, 1,729 stocks ended higher and 2,445 ended lower, for a 1.41-to-1 ratio in favor of decliners.

The S&P 500 posted 25 new 52-week highs and five new lows, while the Nasdaq Composite posted 57 new highs and 110 new lows. Total equity trading volume on U.S. exchanges was about 10.4 billion, below the 20-day average of 12.7 billion.

August gold futures rose 0.69%, or 16.50, to $2.00 a troy ounce. WTI crude oil futures for July delivery rose 2.01%, or 1.49, to $75.56 a barrel. Brent crude futures for August delivery rose 1.87%, or 1.47, to $79.88 a barrel.
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Investors disappointed as no U.S. rate cut expected

Wall Street stocks ended slightly lower on Friday amid turbulence after strong U.S. jobs data confirmed the resilience of the economy but also raised concerns that the Federal Reserve may keep interest rates high longer than many investors had expected.

The U.S. Labor Department said it added about 272,000 jobs in May, well above analysts' forecasts of 185,000. The unemployment rate rose to 4%.

The S&P 500 (.SPX) fell sharply after the report, while Treasury yields rose as traders revised down their expectations for a rate cut in September. The index then rebounded and briefly hit a new intraday record as investors viewed the data as confirmation of a healthy economy.

Utilities (.SPLRCU), materials (.SPLRCM) and communications (.SPLRCL) were the biggest losers. Financials (.SPSY) and technology (.SPLRCT) were the best performers.

For the week, the S&P 500 rose 1.32%, the Nasdaq gained 2.38% and the Dow Jones gained 0.29%.

"This shows that a rate cut is not coming anytime soon. Rising bond yields are putting significant pressure on risk assets, including small-caps," said Sandy Villere, a portfolio manager at Villere & Co in New Orleans.

"It's all about interest rates. They may stay higher longer than expected, and investors will have to adjust to the new environment," he added.

Markets reacted to the employment data by changing expectations for the timing of the Fed's rate cut. After the data was released, traders speculated that the Fed's rate cut from the current level of 5.25% to 5.5% may not begin until November. According to Fedwatch LSEG, the probability of the Fed cutting rates by 25 basis points in September has fallen to 56% from about 70% the day before.

The Dow Jones Industrial Average (.DJI) fell 87.18 points, or 0.22%, to 38,798.99, the S&P 500 (.SPX) lost 5.97 points, or 0.11%, to 5,346.99, and the Nasdaq Composite (.IXIC) fell 39.99 points, or 0.23%, to 17,133.13.

GameStop (GME.N) shares fell 39% in volatile trading that coincided with popular blogger Roaring Kitty's first livestream in three years. The company announced a possible stock offering and a cut in quarterly sales.

Other names popular with retail investors, such as AMC Entertainment (AMC.N) and Koss Corp (KOSS.O), also suffered significant losses, falling 15.1% and 17.4%, respectively.

Nvidia (NVDA.O) shares extended their losses from the previous session, pushing their market cap back below the $3 trillion mark.

Lyft (LYFT.O) shares rose 0.6% after the company forecast 15% growth in total bookings by 2027, announced after the close of trading on Thursday.

Declining stocks outnumbered advancing stocks on the New York Stock Exchange (NYSE) by a 2.72-to-1 ratio. On the Nasdaq, 1,177 stocks advanced and 3,064 declined, giving decliners a 2.6-to-1 ratio.

The S&P 500 posted 17 new 52-week highs and five new lows, while the Nasdaq Composite posted 34 new highs and 149 new lows. Total volume of shares traded on U.S. exchanges was about 10.75 billion, compared with an average of 12.7 billion over the past 20 trading days.

Lower expectations for quick Fed action weighed on stocks, which ended lower. The MSCI World Share Index (.MIWO00000PUS) was down 0.3% after hitting a record high of 797.48.

The yield on two-year notes, a proxy for interest rate expectations, rose nearly 17 basis points to 4.8868% after six straight days of declines. The rise in yields comes as bond prices have fallen.

Rate changes had been expected in September, especially after the European Central Bank cut its deposit rate to 3.75% from a record 4% on Thursday, in line with expectations.

The Bank of Canada on Wednesday became the first G7 bank to cut its key rate, following Sweden's Riksbank and the Swiss National Bank.

The employment report also changed the dynamics of eurozone rate expectations, with traders now forecasting a 55 basis point cut this year, up from 58 bps before the data.

The European Stoxx 600 (.STOXX), which has gained almost 10% since the start of the year, fell 0.2%.

The euro zone bond market also showed weakness, with German 10-year yields up 8 basis points to 2.618%.

In currency markets, the U.S. dollar rose 0.8% against a basket of major currencies, reversing a week of losses ahead of the employment data. The euro fell 0.8% to $1.0802 after a small gain the previous day.

Brent crude futures fell 0.6% to $79.36 a barrel. The stronger dollar weighed on spot gold, which fell 3.6% to $2,290.59 an ounce.
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The main events by the morning: June 13

The United States imposed sanctions against Mosbirzhi, NCC and NSD. Starting from June 13, the dollar and the euro will stop trading on the stock exchange – transactions will take place on the over-the-counter market. The Bank of Russia will set the official exchange rate based on bank reports and over-the-counter trading.

The sanctions will not lead to a significant weakening of the ruble, limiting the fall to 10%. Bloomberg economists noted that in the event of a sharp drop in the exchange rate, the Bank of Russia and the Ministry of Finance will take measures to mitigate the shock by raising interest rates and increasing the supply of currency. It is also noted that the inflow of foreign currency to Russia through export-import channels will remain sufficient.

The exchange-traded currency market in Russia has lost dollars and euros. The sanctions have deprived Russia of the main part of the foreign exchange market. In May, more than 51% of the trading volume was accounted for transactions with the dollar and the euro. Now such transactions will move to a less liquid and transparent over-the-counter market, and you will have to focus on the official exchange rate set by the Central Bank.

The United States extended operations with the NCC until November 1. The United States has allowed energy-related transactions with the National Clearing Center (NCC) until November 1, despite sanctions against the Moscow Exchange. This decision includes transactions related to the extraction, processing, transportation and purchase of oil, petroleum products, natural gas and other energy resources.

Sanctions against the Moscow Exchange undermine confidence in the dollar. New restrictions continue to reduce the importance of the dollar as an international means of payment and reserve currency.

BRICS is developing a new monetary unit. The International Research Institute of Management Problems is working on the creation of a decentralized Unit system for settlements within the framework of the BRICS. The UNT coin will become the payment unit, which will help solve the problem of cross-border payments under sanctions.
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Tech Leads Wall Street to Records, Nasdaq, S&P 500 High

The Nasdaq and S&P 500 posted their fourth straight record closing high on Thursday, while Treasury yields fell to their lowest since early April. Investors reacted to lower-than-expected inflation data and a modest rate-cutting outlook from the Federal Reserve.

The dollar strengthened against major currencies as the Fed's hawkish stance and the prospect of trade tensions between Europe and China sent European stocks sharply lower.

The Dow Jones Industrial Average ended the day slightly lower. The Labor Department reported that producer prices fell 0.2% in May from the previous month, though they rose 2.2% year-on-year, 20 basis points above the Fed's 2% inflation target.

Separately, initial jobless claims hit a 10-month high. The data came after a weaker-than-expected consumer price index report on Wednesday and a revision to the Fed's forecasts, which now call for only one rate cut this year instead of three.

"After a solid rally, markets are taking a bit of a break from yesterday's big news, and that's a good thing," said Ryan Detrick, chief market strategist at Carson Group in Omaha, Neb. "We call it the calm after the storm — consolidating the gains we saw in the first half of June."

Despite the Fed's hawkish rhetoric, expectations are growing that the central bank will cut rates for the first time as soon as September.

According to CME's FedWatch tool, financial markets are pricing in a 60.5% chance of the Fed cutting its target rate by 25 basis points in September.

"The Fed may sound hawkish, but they are dependent on economic data," Detrick said. "With today's positive PPI data, the market is thinking the Fed could ease if inflation continues to decline."

The Dow Jones Industrial Average (.DJI) fell 65.17 points, or 0.17%, to 38,647.04. The S&P 500 (.SPX) rose 12.71 points, or 0.23%, to 5,433.74, and the Nasdaq Composite (.IXIC) added 59.12 points, or 0.34%, to 17,667.56.

The S&P 500 and Nasdaq hit record closing highs for the fourth straight session on Thursday, driven by a continued rally in tech stocks.

The number of Americans filing new jobless claims last week, while another report showed an unexpected decline in producer prices in May, bolstering hopes for an early Fed rate cut.

The Federal Reserve on Wednesday forecast only one rate cut this year, down from three quarter-percentage-point cuts in March.

The S&P 500 tech sector (.SPLRCT) jumped 1.4% and the semiconductor index (.SOX) rose 1.5%, both hitting record closing highs.

Broadcom (AVGO.O) shares soared 12.3% after raising its revenue forecast for chips used in artificial intelligence technology. The company also announced a 10-for-1 forward stock split.

Nvidia (NVDA.O) rose 3.5%, while Apple (AAPL.O) rose 0.5%.

Adobe (ADBE.O) shares rose more than 14% in after-hours trading after the software maker beat Wall Street's second-quarter revenue expectations. However, the stock was down 0.2% in the main session.

New data released Wednesday showed that the consumer price index was unchanged in May for the first time in nearly two years, raising concerns among some investors that the economy could be slowing too much.

The economically sensitive industrial sector (.SPLRCI) fell 0.6%, while the Russell 2000 small-cap index (.RUT) fell 0.9%.

Tesla (TSLA.O) shares rose 2.9% after shareholders approved Elon Musk's $56 billion pay package.

Trading volume on U.S. exchanges was 10.14 billion shares, below the 20-day average of 12.49 billion.

European shares ended wider lower, with the auto sector particularly hard hit as investors worried about Beijing's retaliatory measures to the European Union's new tariffs on electric vehicles from China.

The pan-European STOXX 600 index (.STOXX) fell 1.31%, while MSCI's global share index (.MIWD00000PUS) lost 0.27%.

Emerging market shares rose 0.64%. MSCI's broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) rose 0.67%, while Japan's Nikkei (.N225) fell 0.40%.

U.S. 10-year Treasury yields fell on weak economic data.

Benchmark 10-year notes rose 13/32, sending yields down to 4.2442% from 4.295% late Wednesday.

30-year notes rose 27/32, sending yields down to 4.4% from 4.45% late Wednesday.

The dollar index (.DXY) rose 0.53%, while the euro fell 0.64% to $1.0738.

The Japanese yen weakened 0.22% against the greenback to hit $157.09 per dollar, while sterling was last at $1.2761, down 0.27% on the day.

Oil prices edged up amid choppy trading, with supply growth and a delayed Fed rate cut offset by economic data.

The price of U.S. crude oil rose 0.15% to $78.62 per barrel, while the price of Brent rose 0.18%, stopping at $82.75 per barrel.

Gold prices fell amid a stronger dollar after the release of the PPI report, which was weaker than expected. Spot gold lost 0.8%, reaching $2,303.15 per ounce.
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The main events by the morning: June 17

The Swiss conference on Ukraine turned out to be a «failure». 160 countries were invited to the summit. However, only 101 delegations participated – 78 countries signed the final communiqué, 15 refused. Armenia, Brazil, India, Saudi Arabia, Slovakia, South Africa and the UAE refused to sign the final declaration of the conference, which reflects Russia's economic strength and influence in the international arena.

Russia is facing big problems in importing Chinese goods. In June, the delivery time by sea and train increased to 55-60 days, which is a third higher than in May. The reason is the delayed demand: the situation with payments between the Russian Federation and the People's Republic of China began to improve, which led to a sharp increase in demand for logistics services. There are not enough containers and capacities, transport hubs do not have time to process everything, prices have increased by 30-40%.

The G7 countries will monitor and block the Russian «shadow fleet». The British Foreign Secretary said that the West intends to continue to provide full support to Ukraine and tighten existing sanctions, including blocking ships from the Russian shadow fleet.

NATO is discussing putting nuclear weapons on alert. Alliance Secretary General Jens Stoltenberg said it was necessary to demonstrate a nuclear arsenal in response to the growing threats from Russia and China. According to him, NATO should send a clear signal to its opponents, demonstrating its readiness to use nuclear weapons.

China has become a leader in the electric vehicle market. In 2023, every third new car in the country was electric. China accounted for about 60% of global electric vehicle sales, and demand continues to grow strongly. In a number of countries, the share of electric vehicles in total car sales exceeds 40%, and China will remain the leading player in this segment in the coming years.

The main events by the morning: June 18

The 1992 agreement on the avoidance of double taxation with Russia has been suspended. This was stated by the US Treasury Department. There is no exact information yet, but the measure may affect the W8-BEN form, which reduces the tax on Russian dividends from companies from the United States from 30% to 13%. The suspension will take effect on August 16, 2024.

Sanctions on the Moscow Stock Exchange and its subsidiaries will not have a significant impact on the purchase by non-residents of blocked foreign securities of Russians, the Investment Chamber said. In fact, NSD was already under sanctions.

Foreign flowers may disappear from the Russian market. Russia plans to impose restrictions on the import of flowers from unfriendly countries due to the Rosselkhoznadzor's claims to the quality of their products.

Putin arrived in North Korea today. The Russian president ordered the signing of a Comprehensive Strategic Partnership Agreement with the DPRK.

Beer exports from the European Union to Russia are resuming. In April, the volume of beer exports to Russia amounted to 23 million euros, which is the highest since August last year.

In the context of the recovery of global coal exports, Russia is losing its share in this market. According to the calculations of the Price Index Center, Russian exporters already account for less than 14.6% of global supplies, compared to 17.1% in 2021.
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XAU/USD. Analysis and forecast. The price of gold has reached a new weekly high

Gold has updated its weekly high today, aiming to break through the resistance of the 50-day simple moving average SMA. Incoming macro data from the US point to signs of easing inflationary pressures and a slowdown in the US economy, increasing speculation that the Fed will cut interest rates twice this year. This is a key factor stimulating flows towards the unyielding yellow metal.

Plus, geopolitical tensions and renewed political uncertainty in Europe provide additional support for the precious metal as a safe-haven asset. Meanwhile, the Fed took a more hawkish stance last week, and policymakers continue to favor one rate cut in 2024. A good jump in US Treasury bond yields is also helping to increase demand for the US dollar, which may deter further price growth of the precious metal.

From a technical point of view, before opening new buy positions, bulls should still wait for a steady strengthening beyond the 50-day simple moving average SMA, which is currently around $2,345. The subsequent upward movement will mean that the recent corrective decline has exhausted itself, and the price will move beyond the $2,360 zone – into the supply zone, on the way to the $2,400 mark, with some intermediate obstacle in the $2,388 area. The momentum may extend further towards the historic high reached in May.

On the opposite side, the $2320-2325 area protects against an immediate decline before the round level of $2300. Some subsequent selling below this level and the $2,285 support will be seen as a new trigger for the bears, paving the way for a resumption of the recent pullback from the all-time high. Gold will then be ready to accelerate its decline to the $2,250 level before dropping completely to the $2,220 support and the round $2,200 level.
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