S&P 500 — US Large Cap Index
FTSE 100 — UK Blue Chips
Euro Stoxx 50 — Eurozone Leaders
DAX 40 — German Equities
CAC 40 — French Market Index
Nikkei 225 — Japan Benchmark
Hang Seng — Hong Kong Index
Shanghai Composite — China Mainland
ASX 200 — Australian Market
TSX Composite — Canada Index
Nifty 50 — India Large Cap
STI Index — Singapore Market
KOSPI — South Korea Index
Bovespa — Brazil Equities
JSE Top 40 — South Africa Index
IPC Index — Mexico Market
MUFG’s Lee Hardman notes that the US Dollar has stalled after the Dollar Index met resistance near 100.00 as Middle East tensions between Iran and Israel eased and Oil prices retreated toward USD90. However, he highlights that a hawkish repricing of Fed rate expectations, ahead of key US CPI data and the June FOMC meeting, continues to underpin the Dollar.
Fed outlook and geopolitics steer USD
“The US dollar lost upward momentum yesterday after the dollar index ran into resistance at the 100.00-level.”
“Nevertheless, the US dollar is still continuing to derive more support from the recent hawkish repricing of Fed rate hike expectations.”
“The next key test for the Fed rate hike expectations will be the release tomorrow of the latest US CPI report for May.”
“The next FOMC meeting on 17th June is likely to be an important pivot point for Fed policy expectations and the US dollar as it will be the first time that new Fed Chair Kevin Warsh will outline his thoughts on how the Fed should respond to the energy price shock.”
“Last week’s stronger nonfarm employment report has made it more likely that the Fed will at least drop their easing bias at the June FOMC meeting.”
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