The US Dollar Index (USDX) touched a high of 103.81 on January 1, 2017, and has since lost ground as political and policy uncertainty dominated the US economic outlook.
On June 14, the FOMC raised the federal funds rate by 0.25% to 1.00–1.25%. The FOMC’s surprise announcement addressed its plans to unwind the Fed balance sheet later in 2017 if the economy performs according to its members’ expectations.
The Japan Manufacturing PMI stood at 53.1 in May 2017, as compared to 52.7 in April, outperforming the preliminary market estimation of 52.0.
The Japanese yen (FXY) ended last week at 110.30 against the US dollar (UUP) and close to the previous week’s close of 110.42.
The FOMC (Federal Open Market Committee) will be the focus this week as its members meet on Wednesday, June 14, 2017, to decide on the US rate policy.
The euro (FXE) closed the week at 1.1196 to the US dollar (UUP), posting a 0.76% loss compared to the previous week.
Britain had a shocker last week as a hung parliament outcome in the snap elections will likely keep political uncertainty intact.
The S&P 500 index (SPY) managed to close with minimal losses last week, closing at 2,431.77 compared to 2,433.79 the week before.
The dollar managed to turn around from lower levels last week as risks from former FBI Director James Comey’s testimony and the ECB’s policy statement subsided.
An eventful week came to an end on Friday, June 9, 2017, with no major meltdowns in the markets. The UK elections were the only surprise.
Brexit negotiations have already begun. However, the market now expects some delay in the negotiation process due to the UK election’s outcome.
The surprise result of the UK’s hung parliament outcome creates uncertainty in the UK political space, and it’s also likely to impact Brexit negotiations.
The ECB (European Central Bank) left interest rates unchanged at 0% in the rate-setting meeting that was held on Thursday, June 8.
Former FBI Director James Comey’s testimony to a US Senate special committee on June 8 proved to have a minimal impact on US financial markets.
The UK’s hung parliament result on June 8 was the only real surprise that markets witnessed on what was being referred to as “Super Thursday.”
After the surprising Brexit vote, the United Kingdom is bracing for another possible election surprise on Thursday, June 8.
Political risks in Europe subsided after the French elections, but the ECB is still facing Brexit negotiations and the German elections in September.
Former FBI director James Comey is scheduled to testify before Congress on Thursday, June 8. It’s a big risk-off event that the markets have been anticipating.
The global markets are gripping for the key events set to unfold on Thursday, June 8, the so-called Super Thursday. First, the UK elections remain too close to call.
Japan’s retail sales data for April were reported to have grown at a rate of 3.2% YoY last week (ended June 2), and Japanese equity markets appreciated.