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After the risk aversion demand exits, the US Index of Index may restart the downward "script"?
Wonderful introduction:
Optimism is the line of egrets that are straight up to the blue sky, optimism is the ten thousand white sails beside the sunken boat, optimism is the lush grass that blows with the wind on the head of the parrot island, optimism is the falling red spots that turn into spring mud to protect the flowers.
Hello everyone, today XM Foreign Exchange will bring you "[XM Official Website]: After the risk aversion demand exits, the US Index may restart the downward "script"?". Hope it will be helpful to you! The original content is as follows:
Asian market review
On Monday, the US dollar index fluctuated in the Asian session and hit 99.40 in the European session. Later, due to the decline in dovish remarks by Federal Reserve officials during the US session, the US dollar has lost the $99 mark. As of now, the US dollar is priced at 98.12.
Geographical conflict:
① Iran retaliates and missiles strike the US air force base in Qatar. Trump thanked Iran for notifying the attack in advance and called for peace. ② Iranian officials said they would continue to retaliate against the US attacks and reiterated that the attacks on Iran would need to be stopped if negotiated. ③Trump announced that Israel and Iran have reached a eouu.cnplete agreement and will achieve a full ceasefire. ④Iran has only cracked down on one of the US bases in the Middle East (US officials said no hits, no casualties), and there were no signs of blocking the Strait of Hormuz, with crude oil plummeting by more than 9%. ⑤ Israeli media: Israel informs Iran to seek to end the conflict "within a few days." ⑥ Senior Iranian officials confirmed that Tehran has agreed to a ceasefire agreement with Israel mediated by Qatar and proposed by the United States. ⑦ Advisor to Iranian Parliament Speaker Kalibav said that Trump’s (Iranian) ceasefire statement and ceasefire mechanism “is just a trick to provoke Iran.” ⑧ According to Iran International Television: Many people said that the explosion in Tehran was louder than before, and the air defense forces fought more frequently than in the previous few nights.
Poll: After the US air strike against Iran, Trump's approval rating dropped to 41%, the lowest level in his new term.
Macroeconomics:/p>
Feders officials Bowman and Goulsby both hinted that if inflationary pressure is controlled, they will support a rate cut in July.
The EU plans to approve the 18th round of sanctions against Russia this week.
The US Markit manufacturing and manufacturing PMI continued to expand in June, with the price index hitting its largest increase in four years. The eurozone's service industry PMI hit a new low this year in June, and the manufacturing industry PMI was deeply in contraction, and Germany and France dragged it down.
Germany and Italy were urged to withdraw gold from the United States, "the assets under the bilge must be in their own hands."
Summary of institutional views
National Australia Bank: The dollar may resume its downward trend to some extent
Ray Attrill, head of foreign exchange strategy at National Australia Bank, said that as long as the risk of oil prices soaring again is reduced, I think this will play a positive role from a risk perspective. I think this eliminates the downside risks of global economic growth to some extent. This will prompt investors to believe that the dollar may return to its downward trend to some extent.
Scotiabank Canada: Powell's Congressional Testimony Preview: The whole may continue to wait and see, but if mentioned..., it may soon ignite the market
Feder Chairman Powell will issue a semi-annual monetary policy report and Congressional testimony this week. To a large extent, he may repeat a lot of information from the Fed meeting last week, but this turning point needs to be focused on. Federal Reserve Chairman Powell may be asked whether the July meeting was a "on-site" meeting with a possible rate cut. Powell’s remarks recently sound a lot like the Fed is using the summer holiday to assess developments and data. Powell's usual preference - especially the potential turning point after a prolonged pause - is to control the market, but his speech did not mention "may be suitable for" policy easing or "faster" to guide the timing of interest rate cuts. Therefore, it is necessary to pay attention to whether someone directly asks whether the above wording appears in his recent policies.
In addition, Federal Reserve Director Waller recently appears to be open to a rate cut in July. He may be suggesting that he is one of the eouu.cnmittee members supporting the 75 basis points rate cut this year, while many of his colleagues tend not to cut or cut 50 basis points. In our opinion, he likes to play power in the final stages of the debate, such as his role in promoting the implementation of loose policies too early before early 2024. In addition, it is worth noting that Waller's dovish stance is consistent with Trump's views, and that Trump must elect a successor before the end of Powell's term in May next year.
Dutch International Bank: The euro zone economy "stops", PMI data shows weak growth
The eouu.cnprehensive PMI index in the euro zone in June was 50.2, the same as in May, indicating that the euro zone economy is currently in a stagnation after strong growth in the first quarter. Worries about the escalating situation in the Middle East have added new downside risks to the growth prospects of the eurozone.
The service industry remains worrying, with its business activity indexHovering near the stagnant level. The average of the service industry PMI for the quarter was the weakest since the end of 2023, and the second data supported our view of a very sluggish overall economic activity in the second quarter. Exports to the U.S. significantly boosted growth in the first quarter, and growth in the second quarter could easily turn negative if early procurement reversed.
While management clichés like “change is the only constant” often appear on social media, it is difficult to get rid of this conclusion nowadays. Although the eurozone's PMI data looked good in June, concerns about Iran's response to the U.S. attack over the weekend have put this "economic snapshot" of the PMI's economy in doubt. Although there is still great uncertainty about the extent and duration of Iran’s response, its impact, if limited, will have a negative impact on the eurozone economy.
The current rise in energy prices has directly pushed up the overall inflation level. As energy-intensive manufacturing continues to rise, the outlook for energy-intensive manufacturing will be weakened. Furthermore, geopolitical uncertainty has been an important factor in suppressing consumer and business confidence, which will further lead to weak output. Therefore, under the influence of the recent developments in the Middle East, the current stagnant euro zone economy is facing more downward risks in the short term.
Goldman Sachs: The macro side is better than the technical side, the medium- and long-term bullish logic of the Canadian dollar has not changed, and the adjustment forecast has reached...
After the latest round of risk-driven US dollar rebound, the US accelerator returned to the high in early June. However, we still believe that macro fundamentals support the Canadian dollar to strengthen, and as of last Friday, the Canadian dollar has been moving towards our forecast. Despite the weak short-term data, we remain optimistic about the future economic growth prospects and expect the Bank of Canada to cut interest rates only once this year. The Bank of Canada governor sent a more dovish signal on inflation this week, saying the central bank's preferred core indicators may exaggerate potential inflation levels. We do not object to this view – other inflation indicators, such as the CPIX index that excludes volatility categories, look more modest. However, the Bank of Canada still believes that there is a long lag in policy implementation and the loose policies implemented are still having an impact on the economy.
The uncertain background of global data means that the impact of risk on price movements is greater than that of central bank policies, and we expect this dynamic to continue until the situation becomes clearer. Although rising geopolitical risks have led to wider risk sentiment under pressure, the Canadian dollar should be relatively better able to withstand the effects of this dynamic. We found that the Canadian dollar was one of the most obvious beneficiaries of rising oil prices and performed well last Friday when oil prices first hit.
We continue to expect the US dollar to continue to decline against the Canadian dollar, and given that its trend for most of June is almost the same as our forecasts, we adjusted our 3-month, 6-month and 12-month forecasts to 1.35, 1.34 and 1.32 from 1.36, 1.35 and 1.34 to 1.35, 1.34 and 1.32 respectively to reflect our continued optimism towards the Canadian dollar.
Analyst Vishal Chaturvedi: Australia and the United States reversed the decline, and the daily closing price above 0.64X will activate the range oscillation again
On Monday, Australia and the United States reversed the intraday decline and rose slightly. Earlier, traders reassessed the flow of safe haven funds after the U.S. attacked Iran over the weekend. The initial pursuit of the dollar pushed the Australian dollar to a one-month low, but then mixed Purchasing Managers Index (PMI) data curbed US dollar demand.
Technically, Australia and the United States rebounded strongly from the lower edge of their narrow range, indicating that bulls are struggling to defend key support near 0.6400, which is strengthened by 100-day MA0.6362. The current RSI has moved upwards near the midline, while the MACD is on the verge of a bearish crossover.
If Australia and the United States can break through the daily closing price of 0.6450, it may open the door for retesting the 0.6500-0.6550 area, thereby reactivateing the previous range oscillation trend. However, if you fail to hold above 0.6400, you will face the risk of falling to 0.6300 again.
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