June's First Fortnight: Central Bank Actions
The initial two weeks of June witnessed significant movements from major central banks. The Bank of Japan (BOJ), Federal Reserve (Fed), Reserve Bank of India (RBI), and European Central Bank (ECB) all made critical policy decisions that set the tone for financial markets.
June's Second Fortnight: Political Front Takes the Stage
The latter half of the month shifted focus to the political arena. The US hosted its Presidential debate, while France held its elections. Although inflation in the US shows signs of cooling, the possibility of it resurging after the polls remains a concern.
USD Outlook
The medium-term outlook for the US Dollar remains positive, supported by the depreciating bias of major currencies:
- CNH: Weaker economic outlook.
- JPY: Higher yields on US Treasuries.
- EUR and GBP: Potential political instability with hung parliaments or changes in government.
Given the forecast of higher crude prices and weaker Asian currencies, USDINR is recommended to be bought on dips. The expected range is between 83.35 and 83.70.
Euro Outlook
EURUSD has seen significant correction due to uncertainties surrounding the French elections and recent weak economic data. We anticipate the Euro to hit new lows towards 1.0485, contingent on breaking the 1.0685 level. This bearish view is invalidated if EURUSD manages a daily close above 1.0785.
Bonds Outlook
The yield on the 10-year Indian Government Bond is projected to trade within a near-term range of 6.95-7.05.
Market Report Insights
Our latest market report, compiled with contributions from our sales and trading teams, offers a detailed analysis of how recent data and events have reshaped market dynamics and pricing levels. The "Trades We Like" section highlights trade ideas that are well-suited to the current economic environment
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