The final week of June is upon us, the days are already shortening - at least in the northern hemisphere - and traders are starting to wonder what the second half of the year has to offer. It will not be the most thrilling start to the week if the economic calendar is anything to go by, with Monday in particular giving markets very little to work with. US jobless claims and Q1 GDP hit the newswires on Thursday, before the Fed’s favourite PCE price index graces us with its presence on Friday. The latter figure may help to shape the financial landscape for the next six months. Many traders assumed the first interest rate cuts would have been enacted by now but so far few central banks have been so bold, the ECB being the biggest example.
In light of global interest rate shenanigans, currency wars remain firmly on the menu. Last Friday the Greenback punished the Japanese Yen yet again, with USDJPY rising up to 159.7 by the closing bell. Japanese authorities will not want to see the pair rise much further and have already stated their intention to intervene should the need arise. The massive difference in interest rates between the two currencies remains the main driver behind the move and until this is addressed, the Japanese carry trade will remain a popular one.
Gold took a last minute hit on Friday to close out the week half a percent in the red. The precious metal looked set to end the week on a high after a healthy climb on Thursday, only to see the move completely undone the following day, closing Friday down 1.6%.
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