T3 Monthly Insights - Jun 2024

In June, US indices extended their upward momentum, with the S&P 500 and Nasdaq reaching record highs and posting monthly gains of +3.47% and +5.96%, respectively. This rally was supported by robust jobs reports and lower-than-expected inflation data for May. Non-farm payrolls surged by 272K, surpassing the consensus forecast of 182K, while CPI dipped to 3.3% y/y. Federal Reserve officials indicated a likelihood of a single interest rate cut this year, maintaining borrowing costs at a 23-year high. The Dollar Index rose +1.14% m/m to 105.866.

The Euro softened by 1.24% in June to 1.0713, following the ECB's first rate cut since 2019. President Christine Lagarde remained cautious about future cuts, citing uncertainties in inflation and emphasizing data-dependent decisions. Meanwhile, the UK's Labour Party won a decisive victory in the general election, ending 14 years of Conservative rule. The Bank of England held rates steady at 5.25%, given ongoing electoral campaigns and core inflation rates above 3%. Sterling declined by 0.76% m/m to 1.2645.

The Swiss National Bank reduced rates by 25 basis points to 1.25% for the second time this year, positioning itself as a leader in global policy easing, with another cut expected by year-end. The Swiss Franc closed the month at 0.8988 (-0.39% m/m).

Japanese stock markets hit new highs in June, partly due to the weakening Yen. USDJPY surged by +2.27% to 160.88, prompting speculation of potential intervention. Japan's core inflation rose to 2.5% in May, the highest in three months, driven primarily by increased electricity costs.

In Australia, Q1 GDP growth was sluggish, gaining only 0.1% q/q, the slowest pace since December 2020. The Reserve Bank of Australia kept rates unchanged at a 12-year high of 4.35% in its June meeting, underscoring vigilance on inflation, which remains elevated at 3.6%. Aussie rose +0.26% m/m to 0.667.

Elsewhere, Gold initially declined in early June following strong non-farm payroll data but rebounded to close the month flat at 2326.75

Disclaimer: The information provided on this website is for informational and educational purposes only and does not constitute financial, investment, or trading advice. The content reflects market insights and opinions at the time of publication and should not be relied upon as the sole basis for making financial decisions. Readers are strongly encouraged to conduct their own research and consult with a qualified financial adviser before making any investment or trading decisions. Neither the website nor its authors assume any responsibility for losses incurred based on the information provided.