US shares ease after massive week
Global markets eased on Friday after a bumper week with the US’s S&P 500 finishing with its fifth-straight winning week and the tech-focused Nasdaq now up for eight consecutive weeks.
The Federal Reserve’s widely-telegraphed decision to keep interest rates on hold at last week’s meeting has been one key driver of the recent gains with bond yields lower and commodity prices higher.
The Fed’s decision has been made easier by falling inflation. Inflation expectations were also reported as easing on Friday, with the University of Michigan’s one-year inflation expectation reading dropping from 4.2% to 3.3%.
The People’s Bank of China also provided support last week by cutting a series of key benchmark lending rates. The PBOC announces its monthly loan prime rate tomorrow – with this series also expected to be cut.
Yen lower after BoJ
Key FX markets mostly eased on Friday after a series of big gains last week.
The AUD/USD fell 0.1% after touching the highest level since February last week.
The NZD/USD inched higher, up 0.1%, as it reached three-week highs.
The USD/SGD hit one-month lows on Friday while the USD/CNH was steady after falling from six-month highs.
The biggest moves on Friday were seen in the Japanese yen pairs after the Bank of Japan kept policy on hold.
The JPY tumbled on the news with the USD/JPY at seven-month highs. The AUD/JPY reached the strongest level in nine months and the NZD/JPY hit the highest level since 2015.
PBOC, BoE in focus this week
As we saw in the JPY markets on Friday, central bank policy moves are currently key in FX.
The PBOC decision on Tuesday and Bank of England policy announcement on Thursday will be critical this week.
The US Federal Reserve chair Jerome Powell also speaks, on Thursday and Friday night, in his semi-annual testimony to Congress.
Away from central banks, Friday’s purchasing manager index numbers are critical with the most recent data showing a clear divergence between manufacturing – currency in a slump – and the much-stronger services sector.
JPY hit after BoJ
Table: seven-day rolling currency trends and trading ranges
Key global risk events
Calendar: 19 – 23 June
All times AEST
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*The FX rates published are provided by Convera’s Market Insights team for research purposes only. The rates have a unique source and may not align to any live exchange rates quoted on other sites. They are not an indication of actual buy/sell rates, or a financial offer.
