- European indices finished June's final trading session deeply in red - DAX fell 1.69% closing at its lowest level since November 2020, while CAC40 lost 1.8% and FTSE 100 plunged 1.96%.
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Major Wall Street bourses launched today’s session sharply lower following another slew of weak macroeconomic releases which sparked additional recession fears.
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Nevertheless buyers became more active during the evening hours and managed to erase some losses as some investors hope that inflation reached its peak.
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Currently Dow Jones trades 0.50% lower, while S&P500 and Nasdaq dropped 0.40% and 0.70% respectively. All three major averages are on track to post sharp monthly, and quarterly losses, with the technology sector being the top laggard.
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The core PCE Price Index inflation, the preferred gauge of inflation by the Fed, eased to a six-month low of 4.7% in May, indicating that price increases could be slowing.
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US jobless claims decreased by 2K to 231K compared with market forecasts of 228K, pointing to tight labour conditions.
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Americans' spending edged up 0.2% MoM in May and rose slower than their incomes for the first time since December.
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Nevertheless, the risk of a recession remains enormous. The GDPNow model at the end of the quarter indicates that the data for Q2 may show a 1.0% GDP decline!
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Oil prices plunged nearly 4% early in the session, however buyers managed to cut some losses later on. Still oil is on track to finish the month lower, for the first time since November 2021.
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Meanwhile OPEC+ stick to earlier approved oil output increases in July and August and refrained from any policy discussions for September, Reuters reported. Nevertheless, almost 3 million barrels per day are still required to meet OPEC + production target
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The US, however, points out that the Arab countries will increase production. Investors now await Biden's meeting with Saudi authorities in the middle of next month
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US natural gas futures tumbled below the $6/MMBtu mark, a level not seen since March, after EIA data showed a larger-than-expected storage build.
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Gold fell to major support at $1805 despite weaker dollar, while silver fell over 2.0% to $20.30 level;
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EUR and JPY are the best performing major currencies while USD and CHF lag the most;
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Bitcoin broke below $19,000 after SEC again declined Grayscale’s request to approve 2 spot Bitcoin ETF, while Ethereum plunged 10.0% and briefly fell below $1000 following latest transactions problems on Coinbase
Gold continues to move south and is currently testing an upward trendline which managed to fend off bears in the past. Nevertheless should break lower occur this time, then downward move may deepen towards the support zone around $1760. Source: xStation5
