What to watch for on Tuesday, June 14:
Financial markets started the week in risk-off mode, a continuation of Friday’s negative sentiment after the US reported that inflation continued to rise in May to a multi-decade high. Market participants expect a possible 75 basis point rate hike at this week’s US Federal Reserve meeting.
The macroeconomic calendar remained empty, exacerbating risk-related trading. Wall Street remained under pressure heading into the close, with all three major indices hitting their lowest level since last January.
The EUR/USD pair traded close to the 1.0400 level, while the GBP/USD pair bottomed out at a two-year low of 1.2106, holding close for now. Commodity-linked currencies also tumbled. AUD/USD traded around 0.6920, while USD/CAD shot up to 1.2890. The USD/JPY pair closed the day with a third consecutive doji around 134.30.
Gold fell, with XAU/USD trading around $1,823/troy ounce. Crude oil prices continued to advance, with WTI now trading at $120.70 a barrel.
The yield on the 10-year US Treasury bond ended the day at 3.37%, after reaching a maximum of 3.44%, its highest level since before the pandemic.
The US Federal Reserve will be the first central bank, but not the only one, to announce its monetary policy decision. The Swiss National Bank, the Bank of England and the Bank of Japan will also announce their decisions in the coming days.
If the US Federal Reserve doubles down, the rest will soon follow suit. Financial markets, meanwhile, will see the decision as rising concerns about a possible recession, which will translate into more panic selling.
Source: Fx Street
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