Morning Express
Posted: June 8, 2023, 9:06 a.m.
Our daily research overs the S&P, NQ, Crude Oil, Gold, Silver, Currencies, Corn, Soybeans, Wheat, Livestock, and Softs markets.
Went out to brokerage clients before the bell
- The Bank of Canada hiked its key interest rate to 4.75%, and the 25bps move shocked the risk landscape.
- The BoC can be viewed as a precursor to the Federal Reserve and follows a surprise 25bps hike by the RBA who brought rates to 4.10%. Both central banks cited the need to contain stubbornly high prices, despite slowing growth.
- It is important to note the Federal Reserve’s key rate is 5.00%, higher than the BoC and RBA.
- There was a clear risk-on tone between 8:30 am CT and the 9:00 am CT policy decision.
- The E-mini S&P was rejected by rare major four-star resistance at 4303-4309 and Gold by major three-star resistance at 1983.4-1985.6. The U.S. Dollar Index spiked from a low of 103.56 to above 104 and the 2-year from 4.48% to 4.60%, while the 30-year Bond price fell 1’13 or 1.1%.
- Weekly Initial Jobless Claims surged to 261k, a four-week high, reverting some of yesterday’s priced in tightening., Although equity indices such as the E-mini S&P are still on their backfoot and the 30-year Bond prices are negative on the day, the U.S. Dollar Index is back to yesterday’s low and precious metals have shown life.
- The CME’s FedWatch Tool had the odds of a 25bps hike at 34.5% pre-Jobless Claims and this has slipped to 24% after.
E-mini S&P (June) / E-mini NQ (June)
S&P, yesterday’s close: Settled at 4274.25, down 15.50
NQ, yesterday's close: Settled at 14,359.75, down 255.00
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Crude Oil
Yesterday’s close: Settled at 72.53, up 0.79
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Gold (August) / Silver (July)
Gold, yesterday’s close: Settled at 1958.4, down 23.1
Silver, yesterday's close: Settled at 23.529, down 0.141
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Silver (July)
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