Financial Analyst/Content Writer, RADEX MARKETS
Lawrence J. came from a strong technical and engineering background before pivoting into a more financial role later on in his career. Always interested in international finance, Lawrence is experienced in both traditional markets as well as the emerging crypto markets. He now serves as the financial writer for RADEX MARKETS.
SAHAM
President Trump, Iranian officials and the Pakistani Prime Minister have all publicly indicated that a peace agreement has been reached, with a formal signing ceremony expected to take place on Friday the 19th of June in Switzerland. While some elements of the accord have yet to be finalised, such as those pertaining to the handling of Iran’s existing stockpiles of enriched uranium, the Strait of Hormuz will reopen and financial sanctions against Iran are set to be lifted immediately. The news sent oil prices plummeting early this morning, pushing the Brent Crude benchmark down to $83 while WTI crashed to just $80 per barrel. Precious metals have opened the week with a sizeable gap to the upside, with gold gaining $100 per ounce to surpass the $4,300 threshold and silver rapidly reclaiming $70 as trading got underway. Platinum and palladium also opened strongly, as did Bitcoin, which tipped back over $65,000 per coin in the early hours of this morning. The prospect of an end to hostilities in Iran has likewise sent Asian stock markets soaring, with the Nikkei 225 gaining over 5% earlier today, bringing the index ever closer to 70,000 points. Japanese tech investor SoftBank was the outlying performer, rising an impressive 12%, while the wider tech sector did the remainder of the heavy lifting. US stock market futures are similarly smiling deep in the green ahead of today’s session.
US stock markets have the additional boon of the recent SpaceX (SPCX) IPO, which took Wall Street by storm last Friday. Shares rose by 19% on their first day of trading, lifting the company’s market cap over the $2 trillion mark and making it the sixth largest company in the United States, behind Amazon (AMZN). The success of the offering has done something to restore confidence over concerns of a bubble within the Nasdaq, with reports indicating that the IPO was heavily oversubscribed and retail investors clearly granting their blessing to Elon Musk’s vision. With that said, a significant amount of capital appeared to rotate out of the magnificent seven last week, with Microsoft (MSFT), Apple (AAPL) and Meta Platforms (META), losing 6%, 5% and 4% respectively by the Friday close. A notable exception was Tesla (TSLA), which gained 4% over the course of last week, a testimony to the loyalty awarded to the world’s first official trillionaire.
Big week for central banks. The Reserve Bank of Australia and the Bank of Japan are both scheduled to deliver verdicts on their respective currencies tomorrow, with the latter expected to enact a rate hike on the yen from 0.75% to 1%. The predicted move is the latest in a series of adjustments to move the Japanese currency out of a multi-decade period of zero or sub-zero interest rates and reflects a fundamental shift away from the deflationary, low growth economy that has persisted since the early 2000s. As rates on the yen continue to climb, the Japanese carry trade will further unwind, repatriating funds back home and pulling capital away from US treasuries and other international assets. Wednesday marks the first FOMC meeting with newly appointed Fed Chairman Kevin Warsh at the helm. While no decision is expected of him, it will nevertheless be interesting to see how the overall mood among the board changes as a result of the new incumbent. On Thursday, it is the turn of the Bank of England and Swiss National Bank, neither of which is likely to adjust rates in either direction. The salient point is that different central banks around the world are facing largely different problems; Japan is normalising rates after quarter of a century of stagnation; Europe is beginning to raise rates due to inflation fears; Australia has been battling inflation for several years already and has kept rates high as a result; meanwhile the Fed maintains a wait-and-see approach with no strong reason to act either way. Liquidity may trickle away later in the week as both US and Chinese stock markets will close on Friday due to national holidays. Nothing to watch out for on the earnings calendar this week.
About the Author
Lawrence J. came from a strong technical and engineering background before pivoting into a more financial role later on in his career. Always interested in international finance, Lawrence is experienced in both traditional markets as well as the emerging crypto markets. He now serves as the financial writer for RADEX MARKETS.
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