Daily Markets Broadcast 2019-06-21

Daily Markets Broadcast

2019-06-21

Wall Street extends gains on Fed outlook

With most barriers to a Fed rate cut seemingly removed, US indices pushed higher yesterday, approaching record highs again. Crude oil prices soared following the downing of a US surveillance drone in the Gulf.

US30USD Daily Chart

Source: OANDA fxTrade

• The US30 index rose for a fourth day yesterday, as investors took on more risk in their portfolios following the dovish FOMC meeting yesterday
• The index climbed above the April high and now probably has eyes on the record high of 26,940 struck back in October last year
• The flash Markit manufacturing PMI is seen drifting lower to 50.4 in June from 50.5 last month, the latest surveys show. Note the June Philadelphia Fed manufacturing index released yesterday was a disappointment, falling to 0.3 from 16.6 with expectations of an 11.0 print.
• DE30EUR Daily Chart

Source: OANDA fxTrade

• The Germany30 reverted back to positive mode yesterday after Wednesday’s setback, touching a three-week high
• The May high of 12,452 is within reach while the 78.6% Fibonacci retracement of the May-December drop last year is at 12,581
• Germany’s flash Markit manufacturing PMI is expected to improve slightly to 44.5 in June from 44.3 in May. This would be the 11th month in a row it has been in contraction territory.

WTICOUSD Daily Chart

Source: OANDA fxTrade

• Crude oil prices surged more than 5% yesterday following reports that a US surveillance drone had been shot down in the Gulf
• WTI is moving toward the 100-day moving average at 58.52, which has capped prices since May 31
• Trump tweeted that Iran had made a “big mistake” by downing the drone. There has been no news about possible responses, though in a later tweet he commented that the incident was probably a mistake by a “loose and stupid” individual.

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