Inflation slows down in the UK, analysis of short-term trends of spot gold, silver, crude oil and foreign exchange on June 18

Global Market Review

1. European and American market conditions

The three major U.S. stock index futures rose and fell mixed, Dow futures fell 0.02%, S&P 500 futures rose 0.05%, and Nasdaq futures rose 0.15%. The German DAX index fell 0.52%, the UK FTSE 100 index fell 0.06%, the French CAC40 index fell 0.30%, and the European Stoke 50 index fell 0.38%.

2. Market news interpretation

UK inflation slowed down, but rising oil prices brought new challenges to the central bank

⑴ On Tuesday (June 17), the UK's inflation rate fell to 3.4% as expected, and the Bank of England expected to keep interest rates unchanged this week. ⑵ UK inflation slowdown is mainly affected by falling air fares and corrections to tax data, but the uncertainty brought about by rising energy prices and the Middle East conflict has increased. ⑶ The Bank of England may emphasize a "cautious" policy stance in its policy statement on Thursday, as the Israeli-Iran conflict entered its sixth day and oil prices rose about 14% in a week. ⑷ Deutsche Bank chief British economist Sanjay Raja said rising energy prices will push up inflation expectations, but weaker UK job markets may ease inflation pressure. ⑸ The Bank of England had predicted inflation in May to peak at 3.7% later this year, but the conflict in the Middle East may further push up inflation.

Israel said it attacked 40 more military bases in western Iran

The Israel Defense Force said its jets attacked more than 40 military bases in western Iran on Wednesday morning. The targets of the air strikes include missile depots and other missile-related locations. About 25 fighter jets participated in the attackhit. In addition, the Israel Defense Force said in a statement that Israel hit a launcher equipped with Emad ballistic missiles that were ready to be launched at Israel.

European service industry inflation continues to cool down

⑴ On Tuesday (June 17), Capita Macro's Jack Allen-Reynolds pointed out in a report that Eurozone service industry inflation is continuing to decline. ⑵ Data released on Wednesday showed that the overall year-on-year inflation rate in the euro zone fell to 1.9% in May, and the service industry inflation rate fell to 3.2% from 4.0% in April. ⑶Allen-Reynolds believes that the decline is partly due to the impact of the Easter holiday in April, but even if this factor is excluded, service industry inflation is still on a downward trend, and this trend is expected to continue.

The Central Bank of Namibia maintains interest rates to stabilize the pegged exchange rate with the South African rand

⑴ On Tuesday (June 17), the Central Bank of Namibia kept its main interest rate unchanged to protect the pegged exchange rate of its own currencies to the South African rand, and said global risks limit its ability to cut interest rates. ⑵This is the second consecutive meeting of the bank, which maintained the repurchase rate of 6.75%, and has previously cut interest rates four times in a row. ⑶ The Central Bank of Namibia said that the escalation of conflict in the Middle East and its potential impact on global inflation and growth cannot be ignored. ⑷Namibia's central bank hopes to reduce interest rate differences with South Africa to promote orderly capital flows. ⑸Namibia's international reserves are sufficient to cover 3.7 months of imports, and the real economic growth rates are expected to slightly increase to 3.8% and 4.0% in 2025 and 2026, respectively.

The European www.avaforexcn.commission successfully auctioned short-term government bonds

⑴ On Tuesday (June 17), the European www.avaforexcn.commission successfully issued three-month, six-month and 12-month EU short-term government bonds through auctions. ⑵ The average yield of 3-month Treasury bonds is 1.935%, the average yield of 6-month Treasury bonds is 1.956%, and the average yield of 12-month Treasury bonds is 1.951%.

European and U.S. Treasury yields declined, and the market focused on Fed interest rate decisions

⑴ During the lunch break in Europe on Tuesday (June 17), the eurozone and U.S. Treasury yields fell slightly, and the market focused on the interest rate decisions that the Fed will announce at 1800GMT. ⑵ The market expects the Federal Reserve to keep policy interest rates unchanged, but investors will look for signals of future interest rate paths. ⑶ Saxo Bank expects the Federal Reserve to show stronger willingness to cut interest rates in July, despite the risk of Powell maintaining a tough stance. ⑷The yield of Germany's 10-year Treasury bonds and the yield of the US 10-year Treasury bonds both fell by 1 basis point, falling to 2.525% and 4.380% respectively.

Trump's early decision on the candidate for Fed chairman has caused market concerns

⑴ On Tuesday (June 17), US President Trump said he will soon nominate Fed Chairman Powell's successor, although Powell's term will not end until May 2026. ⑵ Investors are worried about announcing the successor in advanceThe person who is in charge may cause market unrest and lead to a "shadow" chairman, whose policy views may be contrary to the current Fed leadership and cause chaos. ⑶ The market generally believes that the independence of the Federal Reserve is crucial, and any candidate seen as under Trump's control may worry Wall Street. ⑷ Market strategists pointed out that early appointments may cause inconsistent monetary policy information, and investors are worried that the "shadow" chairman may interfere with the current chairman's decision-making. ⑸ According to the forecast market, popular candidates include Hassett, Valsh, Sheldon and Becente, but investors believe that the final candidate may not be on the current hot list.

Russia Krasnodar region has entered an agricultural emergency due to drought

⑴On Tuesday (June 17), Krasnodar region in Russia has declared an agricultural emergency in eight municipalities due to drought. ⑵Krasnodar is one of Russia's largest grain-producing areas, and the region's governor Veniamin Kondratiev said the move will help farmers apply for damages. ⑶ He stressed that the state of emergency will provide timely support to enterprises affected by drought and protect the local economy and labor. ⑷ Previously, Rostov, another major grain-producing region in Russia, had declared a state of emergency in ten areas in early June.

German building permits grow, Berlin plans to further promote construction

⑴ Data from the German Federal Statistics Office on Tuesday (June 17) showed that German residential building permits increased by 4.9% in April, a second consecutive month of growth, indicating that building planning is recovering. ⑵ A total of 18,500 new apartment and housing construction permits were issued in April, an increase of 900 from the same period last year, and an increase of 5.8% in March. ⑶ From January to April, construction permits increased by 3.7% www.avaforexcn.compared with the same period last year. ⑷ The German real estate market is gradually recovering after experiencing a severe recession that began in 2022. ⑸ Cyrus dela Rubia, chief economist at Hamburg www.avaforexcn.commercial Bank, warned that construction speeds need to be accelerated to alleviate housing shortages. ⑹The German government plans to simplify building regulations later on Wednesday through a series of measures to give municipalities greater land use rights to encourage new home construction and renovation.

The EU household material welfare differences in 2024

⑴ In 2024, the per capita actual individual consumption (AIC) in the 27 EU countries was calculated based on the purchasing power parity standard (PPS), and the gap with the EU average was between 72% and 141%. ⑵ The per capita AIC in nine countries is higher than the EU average, Luxembourg has the highest, exceeding 41%; the Netherlands has exceeded 20% and Germany has exceeded 18%. ⑶The per capita AIC in 18 countries is lower than the EU average, with the lowest being Hungary, below 28%; Bulgaria and Estonia are both below 26%. ⑷ In terms of per capita GDP, 10 countries are higher than the EU average, Luxembourg has the highest level, reaching 242%; Ireland has 211% and the Netherlands has 136%. ⑸ Bulgaria, Greece and Latvia had the lowest per capita GDP, at 66%, 70% and 71% respectively.

EurozoneMay inflation data released

⑴ On Tuesday (June 17), the European Statistics Office (Eurostat) released the eurozone May Consumer Price Index (HICP) data. ⑵ Overall inflation in the euro zone remained unchanged month-on-month in May, up 1.9% year-on-year, in line with market expectations. ⑶ Core inflation (excluding energy and unprocessed food) rose 0.1% month-on-month and 2.4% year-on-year. ⑷ Excluding energy, food, alcohol and tobacco, inflation remained flat on the same month-on-month, up 2.3% year-on-year. ⑸ Energy prices fell by 1.2% month-on-month and 3.6% year-on-year, dragging down overall inflation. ⑹Food, alcohol and tobacco prices rose 0.4% month-on-month and 3.2% year-on-year.

The tension in the Middle East and the Federal Reserve's decisions triggered market volatility

⑴ On Tuesday (June 17), global market transactions were cautious, the escalation of tension in the Middle East and the uncertainty of the Federal Reserve's monetary policy decisions made investors wait-and-see attitude towards investment in the stock market and money market. ⑵ Israel's air strike on Iran entered its sixth day, with European stock markets and international oil prices fluctuating, and lacking a clear direction. ⑶Brent crude oil prices fell 0.8%, but are still expected to achieve a weekly increase of 1.6%. ⑷ Israel's military actions have raised concerns about disruptions in oil supply across the Strait of Hormuz, while rising oil prices have also exacerbated global inflationary pressures. ⑸ Investors' concerns about the possibility of direct military intervention in the Middle East have increased, and the market is trying to assess this risk. ⑹ The US dollar has maintained its recent gains due to the United States' status as an energy exporter, while the euro, pound and yen have performed inconsistently. ⑺U.S. stock futures performed flatly, with S&P 500 and Nasdaq 100 index futures both rising about 0.2%. ⑻The Federal Reserve will announce its policy decisions later on Wednesday, with markets expecting it to keep interest rates unchanged, but will focus on updates to its economic and interest rate forecasts. ⑼U.S. retail sales data are weak, and the market will closely monitor the Federal Reserve's "dot map" to find clues about when it will resume interest rate cuts.

3. Trends of major currency pairs in the New York Stock Exchange before the New York Stock Exchange

Euro/USD: As of 20:24 Beijing time, the euro/USD rose, now at 1.1510, an increase of 0.26%. Before the New York Stock Exchange, the (Euro-USD) price rose slightly at its recent intraday level, taking advantage of the positive momentum it gained after relying on EMA50 support, accompanied by the start of a positive signal on the (RSI), after reaching the oversold level, dominance of the main bullish trend on the short-term basis and trading along the slash, on the other hand, yesterday's sharp decline indicated that the bullish trend on the short-term basis was changing.

GBP/USD: As of 20:24 Beijing time, GBP/USD rose, now at 1.3457, an increase of 0.2www.avaforexcn.com1%. Before New York, (GBPUSD) prices rose on the last trading day, affected by the 1.3410 key and support level stability, providing positive impetus to help the currency realize these gains and attempt to recover some of the previous losses and attempt to unload some obvious oversold situations on (RSI), especially with the emergence of positive overlapping signals.

Spot gold: As of 20:24 Beijing time, spot gold fell, now at 3386.80, a drop of 0.05%. Before the New York Stock Exchange, the (gold) price continued to fluctuate on the last trading day, trying to gain positive momentum that could help it recover and rise again, leveraging the dynamic support it represents on the exchange above the EMA50, which prevented the price from falling in the last period, and on the other hand, we noticed the beginning of negative signals on the (RSI).

Spot silver: As of 20:24 Beijing time, spot silver fell, now at 37.088, a drop of 0.04%. Before the New York Stock Exchange, the (silver) price fell in recent intraday trading, except that the price tried to get positive momentum that might help maintain the main bullish trend while trading along a small slash on a short-term basis and attempting to unload some obvious overbought conditions on the (RSI), especially as the negative overlapping signals begin, besides the continued positive pressure from trading above the EMA50, which strongly helped the stability of the bullish trend.

Crude oil market: As of 20:24 Beijing time, U.S. oil rose, now at 73.510, an increase of 0.33%. Before New York, (crude oil) prices rose in recent intraday trading after its early trading unloaded a significant overbought status on (RSI), and its trading above the EMA50 represented positive support, which traded along secondary and major slashes that showed full dominance.

4. Institutional View

Mitsubishi UF: Even if the Fed sends a signal of interest rate cuts, the dollar may have a limited decline

Mitsubishi UF analyst Derek Halpenny said in a report that Fed Chairman Powell may signal a future rate cut at his meeting on Wednesday, but any decline in the dollar may be limited in the context of conflict between Israel and Iran. He said, considering itIndustry market and inflation data are weaker than expected, and the overall tone of Powell's speech may be interpreted as "dove", suggesting a rate cut. This could lead to a slight increase in expectations for interest rate cuts after September. However, the willingness to sell the dollar may temporarily weaken until the prospects for the Israeli-Iran conflict become clearer.

Dutch International Group: Fed meeting prospects: Data rather than sentiment determines interest rates

⑴ On Tuesday (June 17), the market expected the Fed to keep interest rates unchanged at the meeting that day. ⑵ Dutch International Group economist Rogier Quaedvlieg pointed out that the recent data is dovish, but the Federal Reserve's forecasts and dot charts may be biased towards hawkish. ⑶Powell may reiterate his previous position at the press conference: the Federal Reserve will www.avaforexcn.comprehensively consider the Trump administration's tariffs, immigration, fiscal policies and regulatory policies, and will only make decisions after obtaining "hard data". ⑷ Despite weak inflation data since the beginning of the year, the labor market has remained healthy and the unemployment rate has remained at 4.2%. ⑸ Although recent data may be dovish, policy development has a greater impact, and the Federal Reserve's forecast is expected to show higher inflation expectations, higher unemployment rates and lower economic growth expectations.

The above content is all about "[Ihua Foreign Exchange Market Review]: UK inflation slows down, analysis of short-term trends of spot gold, silver, crude oil and foreign exchange on June 18". It was carefully www.avaforexcn.compiled and edited by Ihua Avatrade Foreign Exchange editor. I hope it will be helpful to your trading! Thanks for the support!

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