Housekeeping: Good Morning.
Gold revaluation is a process, not an event
Today:
Commentary: Fed Day
Premium: ING’s Fed assessment and commodity assessment
Session Recap:
The S&P 500 and Nasdaq Comp closed at record highs on Tuesday ahead of the Fed's rate decision and May's consumer inflation report.
Premium / Markets: Fed Day
CPI by CITI
Fed officials should be encouraged by a further slowing in inflation, with core CPI rising 0.26%MoM in May data released the morning of the June FOMC decision. While rounding to 0.3% MoM, there is greater risk of a print that rounds to a softer 0.2%, and we currently pencil in a 0.20% increase in May core PCE inflation.
Fed Day: The dollar could end up lower on the day, Gold and Silver higher
Dot-plot muted effect:
There will be much focus on the dot plots, which are expected to show two instead of three Fed cuts this year. The market prices less than two cuts already this year -meaning that the dollar should not have to rally too far. Regarding the other projections, we do not see the economic projections being a big market mover today
On Changing Statement Lingo:
Should the Fed remove the sentence 'In recent months, there has been a lack of further progress toward the Committee's 2 percent inflation objective' from its statement, short-dated US yields and the dollar could drop.
On Conference Tone:
Equally, Chair Powell typically delivers a dovish press conference and the dollar has ended lower on the day over the last four consecutive FOMC meetings. The same could happen today.
Should some of the above come to pass, we can see DXY will weaken.
Continues in Premium…
Market News:
"Apple shares rallied to their first record since December on Tuesday, as investor sentiment around the iPhone maker continues to improve. Source: Bloomberg
"Boeing’s factory workforce has undergone a dramatic transformation in recent years. Legions of senior machinists retired when the pandemic hit and in the years since. Source: WSJ
"The Biden administration is considering further restrictions on China’s access to chip technology used for artificial intelligence Source: Bloomberg
"The vote on Elon Musk’s $46 billion Tesla pay package this week is so far too close to call- Source: WSJ
Geopolitics:
Hamas and Palestinian Islamic Jihad said they have submitted a response to the proposed Gaza ceasefire deal to Qatari and Egyptian mediators.
Israeli official said Hamas has rejected the proposal for a hostage release presented by US President Biden, while the official added that Israel received the Hamas response via mediators and that Hamas changed the proposal's main parameters.- classic Israel/Hamas
EU is proposing to sanction Russian oil-shipping giant Sovcomflot, according to Bloomberg.- late for a reason
EU is pushing ahead with Chinese electric vehicle tariffs that are set to bring in more than EUR 2bln a year, despite opposition from Germany, according to FT. - inflation
Japan mulls sanctioning groups including Chinese firms for aiding Russia's invasion of Ukraine, according to NHK.- Mercantilism
Some headlines via NewSquawk or DataTrek
Data on Deck:
MONDAY, JUNE 10 None scheduled
TUESDAY, JUNE 11 6:00 am NFIB optimism index
WEDNESDAY, JUNE 12 8:30 am Consumer price index 2:00 pm FOMC
THURSDAY, JUNE 13 8:30 am Producer price index
FRIDAY, JUNE 14 10:00 am Consumer sentiment (prelim) June 72.3 69.11
Premium:
ING Comment: reads like the WSJ did when it talked to readers. Not too technical, and not too dumbed down. ING is making an effort. I’d recommend reading these instead of a daily newspaper for facts and opinion without pushing some other agenda.
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