FED: Inter-Meeting FedSpeak: Uncertainty Equals Patience For Most (2/2)

• RES 4: 0.6700 76.4% retracement of the Sep 30 ‘24 - Apr 9 bear leg
• RES 3: 0.6688 High Nov 7 ‘24
• RES 2: 0.6603 High Nov 11 ‘24
• RES 1: 0.6479/6552 20-day EMA / High June 16 and the bull trigger
• PRICE: 0.6428 @ 15:46 BST Jun 23
• SUP 1: 0.6373 Low Jun 23
• SUP 2: 0.6357 Low May 12    
• SUP 3: 0.6309 38.2% retracement of the Apr 9 - Jun 16 bull cycle
• SUP 4: 0.6275 Low Apr 14

The medium-term trend set-up in AUDUSD is unchanged, the outlook remains bullish. However, a corrective cycle is in play and this has resulted in a break of support around the 50-day EMA, at 0.6435. A clear break of this average would signal scope to a deeper correction and open 0.6357, the May 12 low. Clearance of this support would highlight a stronger reversal. Initial resistance to watch is 0.6479, the 20-day EMA.  

• Treasuries looked to finish higher Monday (TYU5 +11.5 at 111-11), curves bull steepening (2s10s +2.645 at 49.176) as rates & stocks rallied on initially muted response by Iran to US bombing over the weekend.
• Stocks extended gains even after Iran launched missiles at US base in Qatar, possible face saving measure as Iran warned US prior, most if not all missiles intercepted.
• Risk gained traction on dovish comments on potential rate cuts from Fed VC Bowman and Chicago Fed Goolsbee if inflation remains muted.
• Projected rate cut pricing gains traction vs. this morning's levels (*), Dec at the highest since May 12: Jul'25 at -5.9bp (-3.6bp), Sep'25 at -25.2bp (-19.5bp), Oct'25 at -32.6bp (-40.7bp), Dec'25 at -58.8bp (-49.9bp).
• Existing home sales unexpectedly ticked up in May to a 4.03M seasonally-adjusted annual pace, from 4.00M in April (and vs 3.95M survey).
• Flash S&P manufacturing PMI held steady at 52.0 for a second month (cons 51.0) after 50.2 in both March and April whilst services dipped to 53.1 (cons 53.0) after 53.7 in May.

• US Data/Speaker Calendar (prior, estimate)
• 06/24 0830 Philadelphia Fed Non-Manufacturing Activity (-41.9, --)
• 06/24 0830 Current Account Balance (-$303.9B, -$445.5B)
• 06/24 0900 FHFA House Price Index MoM (-0.1%, 0.0%)
• 06/24 0900 S&P CoreLogic CS 20-City MoM SA (-0.12%, 0.0%), YoY (4.07%, 3.94%)
• 06/24 0915 Cleveland Fed Hammack on monetary policy
• 06/24 1000 Fed Ch Powell Semiannual Testimony to House
• 06/24 1000 Richmond Fed Manufact. Index (-9, -10)
• 06/24 1000 Conf. Board Consumer Confidence (98.0, 99.8)
• 06/24 1000 Conf. Board Present Situation (135.9, --)
• 06/24 1000 Conf. Board Expectations (72.8, --)
• 06/24 1130 US Tsy $55B 6W Bill auction
• 06/24 1230 NY Fed Williams keynote remarks
• 06/24 1300 US Tsy $69B 2Y note auction (91282CNL1)
• 06/24 1345 MN Fed Kashkari town hall event
• 06/24 1400 Boston Fed Collins on nation's housing
• 06/24 1600 Fed Gov Barr welcoming remarks
• 06/24 2015 KC Fed Schmid economic outlook
• Source: Bloomberg Finance L.P. / MNI