US STOCKS: Stocks Hammered Late

• RES 4: 1.4328 1.764 proj of the Mar 9 - 31 - May 1 price swing
• RES 3: 1.4292 61.8% Retracement Feb’25 - Jan’26 downleg
• RES 2: 1.4264 1.618 proj of the Mar 9 - 31 - May 1 price swing   
• RES 1: 1.4248 High Jun 24 and 25
• PRICE: 1.4213 @ 16:48 BST Jun 29
• SUP 1: 1.4145 Low Jun 22  
• SUP 2: 1.4051 20-day EMA
• SUP 3: 1.3914 50-day EMA
• SUP 4: 1.3837 Low Jun 3 

USDCAD continues to trade closer to its recent highs. A strong impulsive bull cycle remains intact and last week’s gains strengthen the bull theme. The move higher paves the way for a climb towards 1.4292, the 61.8% Fibonacci retracement of the Feb ’25 - Jan ’26 downleg. Note that the trend remains in overbought territory. A corrective pullback would allow this condition to unwind. The first important support to watch lies at 1.4051, the 20-day EMA. 

Some analyst notes on the June ISM Manufacturing report: 

• Citi: "Manufacturing activity has been growing, and we expect ISM Manufacturing to remain in expansion in June."
• NatWest: "We don’t expect much change in the ISM manufacturing index in June, with our point estimate calling for a 0.3-point drop to a level of 53.7... So far in June, the ISM-adjusted average of four regional manufacturing surveys released have eased, to 54.0 in June from 54.4 in May, pointing to some moderation in momentum. At the same time, China’s Caixin manufacturing PMI, which tend to lead the US ISM manufacturing index by around two months, remained in expansionary territory at 51.8 in May, down from 52.2 in April but still broadly consistent with a constructive manufacturing backdrop."
• Nomura: "We expect the ISM Manufacturing Index ticked down to 53.7 in June from 54.0 in May, in line with regional surveys released so far. New orders and production remained resilient, while supplier delivery times likely improved modestly. Manufacturing employment likely remained in contractionary territory. Prices index likely ticked down but remained elevated compared with historical standards."
• RBC: "We don’t expect to see much movement in the ISM manufacturing Index in June. Most regional Fed manufacturing indexes improved (Philly and Kansas City) or held steady (Texas). Both Richmond Fed and Empire State Surveys weakened slightly."
• TD: "We forecast the ISM mfg. index to modestly revert its May gain, falling to 53.7. June's rapid decline in crude prices might influence responses regarding the outlook for the sector and inflation prospects."

The June ISM Manufacturing report (Wednesday 1000ET) is expected to see relative steadiness in activity at a strong level, alongside a slight dip in prices, in a reflection of the nascent de-escalation in the Middle East conflict. MNI's read of June proxy indicators suggest a similar levelling off in the headline PMI (median expectation 53.8, 54.0 prior) though perhaps more stubborn price pressures (Prices Paid median 77.5, 82.1 prior). 

• Regional Fed manufacturing surveys were somewhat mixed in June, but even when headline indices showed a moderation of headline activity, they were largely pointing to some of the strongest reports in months if not years. The survey period in the first half of the month may have been enough to capture some of the geopolitical risk relief and energy price pullback following the US-Iran Memorandum of Understanding.
• The 5-Fed average ISM-Weighted  PMI dipped to 54.4 from 54.6 prior, remaining around the 54 mark for a 4th month. The Philadelphia survey, the only contractionary regional Fed in ISM Manufacturing-weighted terms in May, saw a strong improvement in June. Dallas, Richmond and New York saw weaker figures compared to May, but in the context of a prior month that was the best in years and with the current levels still very much expansionary. And even these were mixed in ISM PMI terms: Dallas, Kansas City,  and Philadelphia all advanced in that department.
• In terms of ISM PMI-relevant categories: We saw strong improvements in Employment in KC, Dallas, NY, and Philly; only Richmond saw a pullback here - this was the best month since April 2022 on average across employment diffusion indices. New orders were strong in KC and Philly; but weaker in Dallas, NY, and Richmond. Prices paid picked up strongly in KC (48-month high), Philadelphia, and Richmond (2nd highest in 9 months); but dipped in Dallas and NY - the 4-fed average posted a 48-month high overall.
• June's flash S&P Global Manufacturing PMI reading was stronger than expected at 55.7 (54.6 expected, 55.1 prior). If confirmed in the final readings, it would mark a a 49-month high for Manufacturing. However, the details were more mixed.
• Per the report, "manufacturing output grew at the fastest rate since July 2021 in  response to the largest rise in new orders for just over four years. However,  the manufacturing expansion was again partly attributable to demand being temporarily supported by the front-running of potential supply issues and price hikes associated with the war. Input buying by factories rose at a pace not seen since September 2021, and inventories of inputs were accumulated in June at the fastest rate in the near-two-decade survey history barring only the rise following the announcement of tariffs in 2025."
• And "manufacturing headcounts were cut at the fastest rate since the COVID-19 lockdowns of early 2020" while "Although manufacturing input cost inflation moderated from May's recent peak, it was the second-highest for almost four years."