Morning Report
==========

US equities were generally lower after a rally in early trade lost traction amid signs of buyer fatigue. US government bond yields were higher on the back of some hawkish talk from a Fed official. Higher bond yields supported the US dollar which continued to advance, while the Aussie fell. The prices of major commodities were generally lower. In central bank news, the Swiss National Bank cut rates for the second time this year. The Bank of England held steady but hinted that more of its policymakers are close to backing cuts. The Nasdaq declined 0.8%, snapping a seven-day winning streak. The tech megacaps came under pressure during the session with Nvidia Corp. and Apple Inc. recording losses. The Dow Jones outperformed, closing 0.8% higher. The ASX200 was virtually flat. Six of eleven sectors closed in the green, led by financials and real estimate stocks. US bond yields were higher across the curve. The 2-year bond yield increased 3 basis points to 4.74%. The 10-year treasury yield increased 4 basis points to 4.26%. The US dollar continued to advance with the DXY Index breaking through the 105.65 level on two attempts and is now trading at around this level. The Aussie fell against the US dollar, sliding below 0.6650 before increasing and settling at around 0.6656. Commodities were generally lower, with oil, coal, and iron ore all lower. The economy expanded by 0.2% in the March quarter 2024, up from the 0.1% contraction recorded in Q4 2023. The Bank of England MPC voted seven to two to remain on hold in June, the two dissenters preferring to cut by 25bps at this meeting. Initial jobless claims pulled back from a 10-month high last week, falling by 5k to 238k in the period ended June 15. Housing data was weak. Building permits fell 3.8% in the month of May to an annual rate of 1.386mil, the lowest since June 2020. Housing starts fell 5.5% in the month of May to an annualized rate of 1.27mil, down from the 1.35mil recorded in April. The Philadelphia Fed Manufacturing Index declined by 3.2 points to 1.3 index points in June. Minneapolis Fed President, Neel Kashkari, reiterated that the outlook for interest rates remains dependent on the path of the economy, while indicating that it could take up to two years for the inflation to return to its 2% target.

#UsEquities #BondYields #UsDollar #Aussie #Commodities #CentralBanks

https://www.westpaciq.com.au/economics/2024/06/morning-report-21-june-2024