KEY DRIVERS & CALENDAR

TIP – This is a brief bullet-point summary. It is a tool that gives investors and financial advisors a fast and simple list of what to news and market data watch that may move the markets.

• Ukraine Conflict (Ukraine Running Out of Ammo, Peace Agreement Possible?)
• Rising Inflation, Recession & Stagflation Fears
• Chinese Lockdowns Ending
• Wednesday, June 15 – FOMC Meeting Rate Hike
• Wednesday, June 15 – Retail Sales (MoM) (May)
• Thursday, June 16 – Building Permits (May)

Central bank policy formulation is extremely tricky under the dark clouds of high inflation. Macroeconomically speaking, this is going to be a busy week for the United States, with Tuesday being the day for producer prices and Wednesday for retail sales. Wednesday evening will also reveal the Fed’s monetary policy decision and rates. The Fed meeting will likely break or make the markets in the near term. On Thursday midday, the Bank of England will be joining the party with its announcements.

S&P 500

Tip: Use this section to know various sectors’ performance, and weight portfolios, or look for trades. Modern portfolio theory stresses the importance of diversification, but recently several sectors like technology have outperformed others like utilities. This is also a way to narrow the sectors to find investment opportunities.

VIX

TRUFLATION UPDATE

Decentralized finance (DeFi) firm Truflation is based on the same calculation method as the CPI but is different in that it uses real “price data” versus the government’s survey data. It uses current real-market prices data from Zillow, Penn State, and Nielsen to measure and report inflation changes each day.

BONDS

At the start of last week, US rates appeared to be retreating, as investors expected the Fed to ease its stance in the face of worse economic data. However, they rapidly recovered, and the 10-year maturity now pays roughly 2.98 percent, up from 2.73 percent at the end of the previous week. Meanwhile, central bankers Loretta Mester and Lael Brainard have stated that interest rates may need to be lifted again in September. The week in Europe was also marked by a dramatic increase in interest rates.

CRUDE OIL

This week, oil prices have been on a roller coaster again. The European Union’s member countries have finally agreed on a ban on Russian oil. However, it is a restricted ban, as it only applies to marine imports. Pipelines are not targeted, which is a compromise that will buy time to address the concerns of Central European countries’ reliance on Russian oil. Parallel to this, OPEC+ opted to increase production slightly more than planned in July and August during a meeting this week (648 million barrels per day more, instead of 432 million more than in the previous months). However, with most members straining to fulfill their production requirements, it’s hard to envision OPEC+ output rising considerably in the coming months, especially if Russian output falls. Brent is currently trading near USD 118 per barrel, while WTI, the US benchmark, is trading near USD 117.

PRECIOUS METALS

China’s metals prices continue to swing back and forth. Beijing has lifted the cost of metals that are particularly susceptible to this issue, such as nickel and tin, by announcing a new support scheme for renewable energy. In London, the latter is trading at USD 27710 and USD 35250, respectively. Copper has also increased in price, reaching USD 9455 per metric ton. Gold and silver are fighting to recover in the precious metals market, selling at USD 1862 and USD 22.2.

CRYPTOCURRENCY

Bitcoin was about to halt a nine-week loss, and then it crashed like a bag of rocks over the weekend. What seems unclear is the reason for the drop. Some have speculated that it is a victim of investors selling off riskier investments due to high inflation and others have pointed to pending rule changes on crypto. What we do know is that crypto as a whole right is doing a straight dive. In the past we have seen support of around $30K, however, we do not see a current support level.