Global financial markets began the trading session with a variety of interesting dramas. Despite unresolved geopolitical issues, investors seem to be more focused on US economic data that remains immune, thus giving confidence in the profit performance of giant companies.
Here are the latest status of major commodity and currency markets that you must know today:
1. Gold & Crude Oil Start to Stabilize
Gold (XAU/USD): Gold prices are seen moving calmly and holding around the $4,010 level an ounce, while the US bond market (Treasuries) recorded a decline during the New York session yesterday.
US Crude Oil: Oil prices crept up slightly towards $70 per barrel in the early Asian session this morning. This rise erased some of the losses last Tuesday which were triggered by expectations that the ceasefire between the US and Iran will remain intact.
2. US Economic Data Remains Solid, Signal of a ‘Rate Hike’ Appearing?
The latest economic data released on Tuesday shows that the US economy is still ‘healthy’:
JOLTS data (Job Openings): The number of job openings in the US was unchanged in May, indicating that labor market demand remains strong.
Consumer Confidence: The consumer confidence index rose in June, helped by falling gasoline prices that eased people’s worries about the job market.
Fed Policy Impact: In the last meeting, the first under the leadership of the new Chairman, Kevin Warsh, Fed members unanimously kept interest rates on hold. However, the combination of strong jobs data and stubborn inflation has the market betting that the Fed may have to raise interest rates again this year!
In fact, Cleveland Fed President Beth Hammack stressed that she does not see current interest rates stifling the economy and hinted that borrowing costs need to be raised again to bring inflation down to the 2% target. The Fed is scheduled to meet again at the end of July.
3. Worse! Japanese Yen Plunges to 40-Year Low!
The Yen (JPY) continued to weaken and traded around 162.60 per dollar after recording its worst decline in four decades.
After breaking the psychological level of 162 on Tuesday, traders are now turning their attention to the 163 level and above to see intervention from Tokyo. Strategists believe that the Japanese Finance Ministry this time may be more 'soft' and tolerant of the Yen's weakness than they did in 2024.
4. Geopolitical Update: Trump Envoy Arrives in Doha
From the negotiating table in the Middle East, Qatar confirmed that President Donald Trump's two envoys Jared Kushner and Steve Witkoff have arrived in Doha to continue peace talks to ease tensions in the Strait of Hormuz.
However, Qatar (as a mediator) stated that the two US officials will not meet directly with Iranian representatives, thus lowering market expectations for a definitive solution to end the four-month-long war.
Conclusion for Traders: The strong US economy continues to provide a lifeline for the US Dollar, while putting continued pressure on the Yen and curbing the aggressive rise in gold. Anyone trading the JPY currency pair, please be careful as the market could go 'crazy' at any time if Tokyo suddenly intervenes!
