US NATGAS: New Natural Gas Power Plant Planned for West Virginia

The headline ISM Manufacturing PMI fell to a 2-month low 53.3 (54.0 prior) in June, weaker than the 53.9 expected. Even so, this was a 6th month solidly above the 50 level indicating expansion, suggesting continued robustness in US manufacturing. And it was a healthier report than the pullback in the headline index would indicate, reflecting the de-escalation in the US-Iran conflict in the early part of the month.

• The clearest evidence of the positive impact of the nascent US-Iran ceasefire is that Prices Paid fell much more than expected, to a 4-month low 73.0, from 82.1 prior (77.5 expected). This is still a very high level but June's reading marked the biggest decline since July 2022 (it dropped 18.5 points that month).
• And the pullback in Supplier Deliveries to 57.4 from 60.6 prior was negative for the headline PMI reading, but indicates easing supply chains (indeed it was a 4-month low, again reverting back to near pre-war levels). On that note, Inventories picked up 1.5 points to 51.4, a 15-month high, having gained steadily over the last 4 months as manufacturers attempted to secure supplies for fear of supply chain disruptions (Customers' Inventories were continued to be assessed as too low).
• Some of the main details were a little weaker than anticipated. New Orders unexpectedly fell, to 56.0 (57.0 expected, 56.8 prior), with export orders falling 2.1 points to 48.5; Production dropped 1.1 points to a 6-month low 52.2. Both were still firmly positive however, and imports were relatively steady (0.1 points lower at 52.9). The pullback in New Orders vs Inventories potentially portends softer activity ahead though as inventories are worked through.
• But on a brighter note, Employment accelerated to a joint-33 month high 49.7 (48.8 expected, 48.6 prior). Per the report, "Of the six big manufacturing industries, three (Machinery; Transportation Equipment; and Chemical Products) reported higher levels of employment in June. The panelist comment ratio of hiring to managing/reducing head counts was 1.8 to 1 in June, nearly a reversal of the 1-to-2 ratio at the beginning [of the] year".

FX Exchange traded Option. Expiry tomorrow, suggest closing.

• EURUSD (2nd July) 1.1450p, sold at 0.0058, 0.0057, 0.0053, 0.0047 and now 0.0045 in 3k total.

• RES 4: 7700.00 Round number resistance
• RES 3: 7693.75 High Jun 2 and the bull trigger
• RES 2: 7652.75 High Jun 5  
• RES 1: 7567.75/7648.75 High Jun 30 / 15  
• PRICE: 7537.75 @ 15:00 BST Jul 1
• SUP 1: 7357.25/7292.25 Low Jun 26 / 11 and key support
• SUP 2: 7200.00 Round number support
• SUP 3: 7135.00 Low Apr 23  
• SUP 4: 7047.75 50.0% retracement of the Mar 31 - Jun 1 bull cycle

The trend theme in S&P E-Minis is bullish and the latest pullback appears corrective. Note that moving average studies remain in a bull-mode position and this continues to highlight a dominant uptrend. Monday’s rally highlights a bullish engulfing candle - a reversal signal. If correct, it signals the end of the recent correction. Key support lies at 7292.25, the Jun 11 low. A continuation higher would open 7693.75, the Jun 2 high and M/T bull trigger.