2022-06-22 09:15:00

Daily Markets View

Daily Technical & Fundamental View

A light-news Tuesday gave the equity  markets the breathing room it needed to mount  aggressive rebound rally.-after back-to-back weeks of 5% declines,  the markets have pushed the ball under the water far enough now that we`re getting a bounce. But it is but obvious that after a massive monetary binge ,there is no possibility of a soft hangover.

It`s a packed agenda of Fed speakers today . With 67 of 91 analysts forecasting a  75bp in July., theme of speeches can`t differ much from the rhetoric.

US existing home sales for May shows the housing market is cooling quickly.Chicago Fed National Activity index - an under appreciated indicator-  showed a rapid deterioration in activity. ​However Sales and employment components remained positive -does not help optimism that weaker trends for growth will change anytime soon. ​

More Europeans activate first stage of gas crisis plans.Surging gas price exacerbates inflation headache.EU is scrambling to find alternatives to Russian  supplies while Brussels enforced sanctions that cut off Kaliningrad`s rail link.Post-emergency ECB tightening of BTP-bund yield spreads has stalled near 2%-twice as wide as it was a year ago.EUR/USD struggles above 50% of 1.0774-1.0359 decline at 1.0566.

Weaker yen trend has  the overwhelming  influence on CNY.China warns of historic flooding in South-Will impact economic activity in those provinces- implications are well known - Outlook  positive on close above 23.6% Fibo 6.7179.Bollinger uptrend channel at 6.7363 will unleash bulls

BoE chief economist Pill has become important  in the light of his recent comments : rate rises cannot fine-tune sterling- BoE isn`t committed to being `forceful`. He is set to speak on Friday- should see an implosion in GBP then.May CPI today is due to hit highs not seen since 1982. Obj :1.2170 - 50 % of 1.1934-1.2405

USD/JPY traded to 136.71- verbal intervention to heat up. Recall  pair had surged 22 yen from a base on 114. These moves have, however, been interspersed with decent retracements. Decisive break above 136.90-137.00 would target 139.95,  (high Sep 98).

Regime shift still being seen as a episode by all stake holders -  USDINR should show life above 78.10 into 78.30 especially as premiums slump lower - aggressive forward book unwind without taking into account the newer reality of  outflows- cash dollar shortage  ?  Vicious cycle  sounds too familiar.