ICM Capital - Market Update

Friday, June 25, 2021

marketupdate@ICMCapital.co.uk

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Market Comment

Market Wrap: Stocks, Bonds, Commodities

On Thursday, the three major U.S. stock indices closed higher. The Dow Jones Industrial Average rose 322 points (+1.0%) to 34,196, the S&P 500 gained 24 points (+0.6%) to 4,266 and the Nasdaq 100 added 91 points (+0.6%) to 14,365.

The Automobiles & Components (+2.6%), Banks (+1.6%) and Semiconductors & Semiconductor Equipment (+1.5%) sectors led the advance, while the Retailing (-0.7%), Real Estate (-0.5%) and Utilities (-0.1%) sectors were under pressure.

Regarding U.S. economic data, first quarter annualized GDP growth was unrevised at 6.4% as expected, while initial jobless claims fell to 411,000 in the week ended June 19, more than the estimated 380,000. Later today, personal income is expected to drop 2.5% over month in May, while personal spending is estimated to grow 0.4%. Also, final readings of June University of Michigan consumer sentiment index is anticipated at 86.5.

European stocks were broadly higher. Germany's DAX 30 climbed 0.9%, France's CAC 40 rose 1.2%, and the U.K.'s FTSE 100 was up 0.5%.

The U.S. 10-year Treasury Yield edged up to 1.492% from 1.487% Wednesday.

U.S. WTI crude futures gained 0.3% to $73.30 a barrel.

Gold price slipped 0.2% to $1,775 an ounce.

Market Wrap: Forex

The U.S. dollar was broadly flat against its major peers, as the ICE dollar index closed at 91.80.

GBP/USD dropped 37 pips to 1.3922. The Bank of England kept its benchmark rate unchanged at 0.10% as expected, though pointing out that "policy should both lean strongly against downside risks to the outlook and ensure that the recovery was not undermined by a premature tightening in monetary conditions".

EUR/USD added 7 pips to 1.1932. The German IFO Business Climate Index climbed to 101.8 in June from 99.2 in May, better than the expected 100.7.

USD/JPY fell 8 pips to 110.86.

Both AUD/USD and NZD/USD posted a four-day rally, gaining 7 pips and 16 pips respectively.

Bitcoin bounced 5.4% to $34,859, and Ether advanced 3.9% to $2,004.

Morning Trading

In Asian trading hours, EUR/USD edged up to 1.1940 and GBP/USD climbed to 1.3930.

USD/JPY was little changed at 110.88.

Gold remains subdued at $1,778 an ounce.

Bitcoin extended its rebound to $35,140.

Expected Today

The eurozone's M3 money supply is expected to increase by 8.5% over year in May.

Germany's July GfK consumer confidence index is estimated at -4.0.

In the U.S., personal income is expected to drop 2.5% over month in May, while personal spending is estimated to grow 0.4%. Also, final readings of June Michigan consumer sentiment index is anticipated at 86.5.

Calendar

13:30 US MAY Personal Income exp: -3.1% prev: -13.1%
13:30 US MAY Personal Spending exp: 0.3% prev: 0.5%
15:00 US JUN F U. of Michigan Confidence exp: 86.5 prev: 86.4

Forex	Last	%1D	%YTD
EUR/USD	1.1939	0.06	-2.30
USD/JPY	110.89	0.01	7.30
GBP/USD	1.3932	0.07	1.90

Commodities	Last	%1D	%YTD
Gold	1,778.0100	0.16	-6.30
Silver	26.0514	0.40	-1.30
Crude Oil	73.3900	0.12	51.70

EUR/USD Intraday: under pressure.

Pivot: 1.1955

Our preference: short positions below 1.1955 with targets at 1.1910 & 1.1895 in extension.

Alternative scenario: above 1.1955 look for further upside with 1.1970 & 1.1985 as targets.

Comment: as long as 1.1955 is resistance, look for choppy price action with a bearish bias.