The European Central Bank and the Bank of England will hold policy meetings today, with both strongly expected to make no changes to their interest rates.
- The major fundamental input of the week is happening today, with both the European Central Bank and the Bank of England holding policy meetings. Both central banks are expected to make no change to existing rates of interest. If either bank does make a cut, that would almost certainly produce a sudden strong fall in the relative value of the relevant currency (Euro or British Pound).
- The selloff in tech stocks continued in Asia after starting in North America yesterday, with the S&P 500 Index also trading sharply lower but regaining much of its value. The NASDAQ 100 Index closed lower by more than 1% and touched a new 2-month low price.
- Precious metals are consolidating after their recent extreme selloffs, with Gold holding up the best, but failing so far to recover even half of its crash in value last week - this point would sit at about $5,100 and may become an important area of resistance. Traders who believe in 50% retracements within strong swings as good trade entry opportunities might want to try to short Gold if it rejects $5,100 soon. It is notable that Gold is performing much better than all other precious metals, so if you are going to invest in one of them, Gold now looks like the best choice. Silver is performing notably worse.
- Bitcoin continues to fall to fresh lows, reaching a new 15-month low price near $70,000.Something is off with Bitcoin and the crypto sector. If I wanted to buy here, I would sit on the sidelines and keep watching and waiting for the time being. I am not short but I think Bitcoin has a bearish outlook and will probably fall even further, maybe even to the $50,000 area.
- In the Forex market, since today's Tokyo open, there has not been much price movement - nothing meaningful, anyway. The pair I see most suitable for day trading is the AUD/USD on the long side. The Japanese Yen has depreciated ahead of next weekend's lower house election, and could end up making its strongest weekly drop since October last year.
- Yesterday saw the US suddenly take a more hawkish position on Iran, with rumours that Friday's Oman meeting between the USA and Iran for talks was being abandoned - this saw US stock markets fall suddenly. However, the talks are back on, although Iran is insisting that nothing will be on the table except its nuclear activity, while the USA publicly insists that other issues must be discussed as well. It starts to look as if Trump may agree to some kind of nuclear deal where the Islamic Republic of Iran just basically holds back a bit, at least cosmetically, during the remaining 3 years of the Trump presidency, in the hope that future US Presidents will be weaker on the issue. Prediction markets are now seeing a US strike on Iran as unlikely, even by the end of June. On the other hand, it may be that President Trump wants Iran to be seen to reject a seemingly reasonable deal before launching a strike, so it goes down better with the American public. If I am correct about no US strike, this is bearish for crude oil, but it may open the way to another war between Israel and Iran later in 2026, as there is no way Israel is going to sit back and watch a belligerent Iran develop thousands of large warhead ballistic missiles with 2,000 km range.
- Yesterday saw releases of US ADP Non-Farm Employment Change & ISM Services PMI. Both came in more or less as expected so did not affect the market.