Category: EU

  • DAX 40 Crosses 25,000 on ECB Rate Optimism – Tuesday, 16 June

    Snapshot: The DAX 40 has convincingly cleared the 25,000 milestone as Eurozone inflation settling at 2.0% and ECB’s Philip Lane outlining a constructive economic path underpin regional equities. This domestic support is amplified by easing global energy anxieties following the US-Iran framework agreement, which has kept WTI crude stable around $95.

    • German corporate defense is in clear view as Commerzbank gains 1.6% on Berlin’s rejection of UniCredit’s hostile bid, reinforcing local market stability with 25,000 now serving as critical psychological pivot support.
    • The primary external threat is the US 08:30 ET data release; any upside surprise that lifts US 10-year yields beyond 4.48% risks putting pressure on the index’s heavily weighted automotive and technology sectors.

    Bias into NY: We hold a bullish bias above 25,000, targeting 25,150. Deflated German HICP of 2.0% gives the ECB ample room to maintain its supportive stance, which should insulate DAX industrials from the drag of rising US 10-year real yields at 2.17%.

  • EUR/JPY: Guppy Bulls Charge Ahead on BOJ Hold – Tuesday, 16 June

    Snapshot: EUR/JPY is pressing higher after the Bank of Japan held its policy rate at 0.50% at 12:19 JST, failing to deliver the hawkish acceleration needed to rescue the Yen. This policy inertia leaves the ECB’s 2.50% deposit rate yielding a highly attractive carry, with ECB Chief Economist Philip Lane’s 13:10 London address expected to confirm a measured, meeting-by-meeting easing bias. Eurozone HICP stabilizing at 2.0% further minimizes any urgency for aggressive ECB cuts, cementing the pair’s upward trajectory.

    • Divergence Signal: The 200bp nominal policy rate spread remains a structural tailwind for the Euro, reinforced by core Eurozone HICP at 2.3% which keeps ECB doves on a tight leash.
    • Intervention Thresholds: Japanese MoF verbal intervention remains the primary risk during the NY transition as any rapid extension of Yen weakness past prior defense zones triggers communication alerts.

    Bias into NY: Tactical upside bias remains dominant into the NY open, favoring a run toward psychological resistance at 172.00, amplified secondary to the domestic story by a supportive global carry backdrop as US 10Y yields hold steady at 4.48%.

  • EUR/GBP Under Pressure on Policy Divergence – Tuesday, 16 June

    Snapshot: EUR/GBP is trading softly around the 0.8425 level, down 0.15% on the session, as policy divergence between the ECB and the Bank of England caps Euro upside. While UK headline CPI has softened to 2.8%, the MPC’s cautious stance on sticky services inflation near 5% keeps Gilt yields supported relative to Bunds. Today’s primary catalyst is ECB Chief Economist Philip Lane’s speech on the euro area outlook at 13:10 BST.

    • EUR/GBP faces heavy resistance at 0.8460, with the bias tilted toward testing the key 0.8400 support level as the 200bp policy rate gap continues to favor Sterling.
    • A strong US 08:30 NY data print could lift Treasury yields and spill over into Gilts, compounding the bearish pressure on the Euro leg.

    Bias into NY: We are tactically bearish on EUR/GBP, targeting a test of 0.8385 as ECB easing prospects weigh on the Euro leg, a move that should accelerate if rising US real yields continue to pressure global fixed income.

  • DAX 40 Clears 25,000 on ECB Easing Tailwinds – Tuesday, 16 June

    Snapshot: The German Index has cleared the historic 25,000 milestone, driven by Eurozone and German HICP both landing at the ECB’s 2.0% target, giving Philip Lane a clear runway to strike a dovish tone in his address today. Domestic momentum is amplified by corporate action, with Commerzbank rallying 1.6% on Berlin’s rejection of UniCredit’s hostile approach, and GEA Group surging 5% following a broker upgrade. While easing energy worries support the broader tape, the domestic disinflation narrative remains the primary engine of today’s leg higher.

    • Key Level: Holding above the structural 25,000 handle shifts near-term targets to 25,180, underpinned by the structural collapse in German HICP from 2.6% to 2.0% which solidifies the ECB easing cycle.
    • NY Session Watch: The 08:30 NY macro data print could trigger US yield volatility; a further backup in the US 10Y real yield beyond 2.17% risks capping progress in rate-sensitive German autos and tech, which have lagged the broader industrial bid.

    Bias into NY: We are buyers of dips above 24,950 targeting 25,150, as the return of German inflation to the 2% target establishes a sovereign policy cushion that should easily withstand any temporary volatility from the US session.

  • Euro/Yen Gains Cap as ECB Easing Divergence Looms – Tuesday, 16 June

    Snapshot: EUR/JPY is consolidating overnight ranges as the market digests the Bank of Japan’s policy hold at 0.50% and pivots to ECB Chief Economist Philip Lane’s upcoming address at 13:10 London. While the BoJ’s sluggish normalisation keeps the yen fundamentally weak, the Euro’s yield advantage is gradually eroding after the ECB’s April cut to 2.50% and core HICP cooling to 2.3%.

    • The 200bp nominal policy rate differential remains the primary anchor for carry, but any dovish rhetoric from Lane regarding softening wage trackers or services inflation will likely trigger a direct test of the 168.50 support level.
    • Japanese Ministry of Finance intervention risk remains highly asymmetric, capping EUR/JPY topside near 170.50 even if US 10Y yields backing up to 4.48% provides temporary support to the broader G10 carry trade.

    Bias into NY: Tactical bias is to sell EUR/JPY rallies up to 170.20, targeting a break below 168.00, as the ECB’s persistent easing bias diverges from the BoJ’s slow-burn normalisation path.

  • Euro/Sterling Heavy as Divergent Central Banks Limit Upside – Tuesday, 16 June

    Snapshot: EUR/GBP is trading heavy as the ECB’s 2.50% deposit rate sits 200bp below the BoE’s 4.50% Bank Rate, with traders looking to Philip Lane’s 13:10 BST speech for confirmation of softening Eurozone wage trackers. Although UK headline CPI cooled to 2.8% in April, sticky services inflation near 5% keeps the MPC hesitant to commit to cuts, structurally supporting Sterling.

    • The 0.8450 pivot remains key; a clean break below targets the 0.8400 level as the yield advantage favors Sterling assets while the ECB retains its meeting-by-meeting easing bias.
    • Lane’s comments at 13:10 BST are the key risk for the session; any dovish rhetoric around softening wage pressures will accelerate EUR sales, with a quiet US morning macro calendar and stable risk appetite (VIX at 16.2) offering little distraction.

    Bias into NY: Bearish EUR/GBP toward 0.8400, as persistent UK services inflation near 5% prevents the BoE from matching the ECB’s active rate-cutting cycle.

  • NY Session Tactical Brief – Tuesday, 2 June

    Regime: Mixed: VIX steady at 15.32 but yields are pulling back modestly, capping the DXY at 99.05 amid light risk-off sentiment.

    Today’s market themes:

    • ECB watch: Eurozone inflation data reinforces the case for a June rate hike, setting up a potential hawkish surprise.
    • Oil supply: Geopolitical tensions compete with global demand concerns and US-Iran talks, causing volatility.
    • Positioning squeeze: Crowded short JPY and crowded long BTC may be vulnerable given current data.

    The setup: Eurozone CPI data is key today. The market is pricing in a high probability of an ECB rate cut in June, so an upside surprise could trigger a significant EUR rally against both the USD and GBP. Key risk is a weaker-than-expected print, confirming the dovish expectations and leading to EUR weakness. Watch EUR/USD at 1.1650 and US-DE 10Y spread for confirmation.

    Watch list (native time per event):

    • 11:00 CET EUR Core CPI Flash Estimate y/y (forecast 2.4%, prior 2.2%)
    • 10:00 ET USD JOLTS Job Openings (forecast 6.87M, prior 6.87M)
    • 11:30 AEST AUD GDP q/q (forecast 0.5%, prior 0.8%)

    Bias by asset:

    • DXY:
      • Direction: Neutral
      • Domestic (US): Fed data watch / yield levels
      • Cross: Euro strength / risk sentiment
      • Levels: Support 98.80 / Resistance 99.20
    • EUR/USD:
      • Direction: Bullish
      • Domestic (EU): Inflation data key for ECB path
      • Cross: DXY pullback / US-DE 10Y widening
      • Levels: Support 1.1620 / Resistance 1.1680
    • GBP/USD (Cable):
      • Direction: Neutral
      • Domestic (UK): BoE Bailey speech / Gilt direction
      • Cross: DXY / US-UK 10Y stable
      • Levels: Support 1.3440 / Resistance 1.3500
    • USD/JPY:
      • Direction: Bearish
      • Domestic (JP): Intervention risk / yield curve control
      • Cross: US 10Y stable / risk-off tone
      • Levels: Support 159.50 / Resistance 160.00
    • USD/CAD (Loonie):
      • Direction: Neutral
      • Domestic (CA): WTI under pressure / BoC stance
      • Cross: DXY / US-CA 10Y stable
      • Levels: Support 1.3820 / Resistance 1.3860
    • AUD/USD (Aussie):
      • Direction: Neutral
      • Domestic (AU): GDP and commodity prices in focus
      • Cross: DXY / US-AU 10Y spread
      • Levels: Support 0.7150 / Resistance 0.7200
    • NZD/USD (Kiwi):
      • Direction: Bearish
      • Domestic (NZ): RBNZ easing bias / dairy prices
      • Cross: DXY / risk sentiment
      • Levels: Support 0.5900 / Resistance 0.5950
    • USD/CHF (Swissy):
      • Direction: Neutral
      • Domestic (CH): SNB stance / Swiss data
      • Cross: DXY / risk-off flows
      • Levels: Support 0.7840 / Resistance 0.7880
    • EUR/GBP, EUR/JPY, GBP/JPY:
      • Direction (per cross): EUR/GBP Bullish, EUR/JPY Bullish, GBP/JPY Neutral
      • Domestic: ECB vs BoE/BoJ differentials
      • Cross: DXY / risk sentiment
      • Levels: Watch relative yield spreads
    • XAU (Gold):
      • Direction: Bullish
      • Domestic (asset-specific): Real yields down / CB demand
      • Cross: DXY / risk aversion
      • Levels: Support 4500 / Resistance 4550
    • XAG (Silver):
      • Direction: Bullish
      • Domestic (asset-specific): industrial demand / gold link
      • Cross: DXY / risk sentiment
      • Levels: Support 7500 / Resistance 7700
    • WTI / Brent:
      • Direction: Bearish
      • Domestic (asset-specific): EIA data / OPEC / US-Iran talks
      • Cross: DXY / risk sentiment
      • Levels: Support 90.00 / Resistance 92.00
    • Copper:
      • Direction: Neutral
      • Domestic (asset-specific): China demand outlook
      • Cross: DXY / global growth outlook
      • Levels: Support 660 / Resistance 670
    • SPX:
      • Direction: Neutral
      • Domestic (US): earnings / Fed watch / yields
      • Cross: VIX regime / global risk
      • Levels: Futures support 7580 / cash resistance 7620
    • NDX:
      • Direction: Neutral
      • Domestic (US): earnings / real yields
      • Cross: Rate sensitivity / VIX
      • Levels: Support 30300 / Resistance 30600
    • US30 (Dow):
      • Direction: Neutral
      • Domestic (US): earnings / cyclical tone
      • Cross: Bond-yield reaction
      • Levels: Support 50700 / Resistance 51000
    • UK100 (FTSE):
      • Direction: Bullish
      • Domestic (UK): Sterling direction / Gilt yields
      • Cross: Global risk / US tone
      • Levels: Support 23200 / Resistance 23400
    • DAX:
      • Direction: Neutral
      • Domestic (DE): Bund yields / data watch
      • Cross: US tech / DXY
      • Levels: Support 25100 / Resistance 25300
    • Nikkei:
      • Direction: Neutral
      • Domestic (JP): JPY level / JGB
      • Cross: US tech / risk sentiment
      • Levels: Support 65500 / Resistance 66700
    • BTC:
      • Direction: Bearish
      • Domestic (asset-specific): funding rates / ETF flows
      • Cross: DXY / risk sentiment / Nasdaq correlation
      • Levels: Support 68000 / Resistance 70000

    Positioning watch: JPY remains heavily shorted (0th percentile), increasing squeeze risk if the BoJ signals policy normalization. BTC is also a crowded long (94th percentile), leaving it vulnerable to profit-taking on any risk-off move.

    The pain trade: A surprise hawkish signal from the ECB, combined with soft US data, would spark a EUR rally and punish USD longs, while forcing JPY shorts to cover aggressively.

  • Euro Edges Higher; Inflation Data Key for ECB – Tuesday, 2 June

    Where we are: EUR/USD is currently trading at 1.1650, up 0.14% on the day. The pair has traded in a narrow range of 1.1629 to 1.1655 so far. This level is slightly above yesterday’s NY close, suggesting a modest bid tone in early trading.

    What’s driving it: The Euro is catching a mild bid on anticipation of slightly stronger-than-expected Eurozone inflation data due at 11:00 CET. Markets are pricing in nearly a done deal for a 25bp hike at next week’s ECB meeting, with another hike anticipated later this year. That said, ECB rhetoric has been guarded – notably, Schnabel has suggested it’s premature to specify the number of rate hikes needed. A stronger than expected CPI print could seal the deal for further ECB tightening and send the Fiber higher, especially if services remain sticky.

    • ECB last cut rates 25bp at its April 17 meeting, retaining a meeting-by-meeting assessment of policy.
    • German 2Y Schatz yields are slightly higher, up 2bp to 2.604%. This is also supporting the Single Currency.
    • CFTC data shows net non-commercial Euro positioning is modestly long, at the 10th percentile. This raises the risk of a sharp squeeze higher if the headline inflation data beats convincingly.

    NY session focus: Today’s Eurozone CPI Flash Estimates at 11:00 CET will be the key catalyst to watch. The market expects headline inflation at 3.2% and core at 2.4%. A beat on either will strengthen the case for a follow-up hike, potentially driving EUR/USD towards 1.1700. Below that, strong resistance will be found between 1.1750-1.1800. Bear in mind that US JOLTS data is also scheduled for release at 10:00 ET, which may add to volatility in the afternoon. The pain trade would be a weaker Eurozone inflation print, leading to a swift repricing of ECB expectations and a sharp drop in EUR/USD toward 1.1600.

  • DAX Treads Water Amid Mixed Data – Tuesday, 2 June

    Snapshot: The DAX is currently trading at 25164, down 31 points, weighed by slightly disappointing HICP prints, which at 3.2% and 2.4% respectively were roughly in line or slightly above expectations. Traders will be watching for reactions to the US data later this morning.

    • The DE 2Y Schatz is holding steady at 2.604%, suggesting limited immediate reaction to the HICP figures.
    • Focus shifts to US macro sentiment with a possible downside catalyst if US yields reverse course.

    Bias into NY: Neutral-to-slightly bearish. The lack of strong positive momentum in the face of firming Bund yields suggests limited upside in the near term, with the index vulnerable to a further slide towards 25,000 if US data disappoints.

  • Euro/Yen Momentum Extends as ECB Easing Expectations Build – Tuesday, 2 June

    Snapshot: EUR/JPY at 186.15, up 0.22% on the session, fueled by the prospect of further ECB easing. The 2bp rise in the German 2-year Schatz yield is being overshadowed by growing anticipation for further rate cuts following April’s 25bp move. Focus now shifts to the 11:00 CET Eurozone CPI Flash Estimate.

    • Watch for the Eurozone Core CPI Flash Estimate; a print below 2.4% would solidify expectations for a June ECB cut.
    • Rising MoF/BoJ communication risk around Yen weakness past prior intervention zones could trigger a sharp reversal.

    Bias into NY: Bullish EUR/JPY while the market prices further ECB easing into the short end; a decisive break above 186.21 opens a path towards 186.50. DXY weakness is providing a tailwind, but the domestic easing narrative is in the driver’s seat.

  • Euro/Sterling Bid Fails at Resistance – Tuesday, 2 June

    Snapshot: EUR/GBP trades at 0.8647, up 0.02% intraday, with the single domestic driver being the divergence between ECB and BoE stances. UK inflation prints are trending downward while the unemployment rate ticks up. Today’s catalyst will be the 15:00 London BOE Governor Bailey speech.

    • Resistance sits near 0.8650, where intraday highs have stalled.
    • Watch for any hawkish surprise from Bailey regarding future rate decisions that could weigh on the pair.

    Bias into NY: Neutral to slightly bearish, as the BoE remains reluctant to commit to rate cuts given stickier services inflation; a DXY pullback alongside soft US yields could provide a temporary tailwind, but the underlying divergence favours Sterling strength toward 0.8600.

  • NY Session Tactical Brief – Monday, 1 June

    Regime: Risk-on, supported by easing global inflation expectations as indicated by lower US 10Y yields and firm equities futures.

    Today’s market themes:

    • ISM Day: US ISM Manufacturing PMI key for near-term Fed rate path signals.
    • USD strength: DXY gains traction amid mixed global growth outlook, impacting emerging market stocks.
    • Oil price volatility: Geopolitical tensions and supply concerns continue to underpin oil prices.

    The setup: ISM Manufacturing PMI at 10:00 ET will be crucial in determining the near-term Fed outlook. A print above 53.3 could fuel further DXY gains and pressure risk assets, while a miss could see yields dip and equity futures rally. Watch US 10Y around 4.45%.

    Watch list (native time per event):

    • 10:00 ET USD: ISM Manufacturing PMI (forecast 53.3, prior 52.7)
    • 10:00 ET USD: ISM Manufacturing Prices (forecast 85.3, prior 84.6)
    • 20:30 ET USD: FOMC Member Powell Speaks

    Bias by asset:

    • DXY:
      • Direction: Higher.
      • Domestic (US): ISM data crucial; Fed rhetoric leaning hawkish.
      • Cross: Risk-off flows supportive; EUR/GBP weakness adds to momentum.
      • Levels: Resistance 99.20, Support 98.80.
    • EUR/USD:
      • Direction: Lower.
      • Domestic (EU): No fresh domestic catalyst — sensitive to US response.
      • Cross: DXY strength weighs; US-DE 10Y widening pressures.
      • Levels: Resistance 1.1670, Support 1.1630.
    • GBP/USD (Cable):
      • Direction: Neutral to slightly lower.
      • Domestic (UK): No fresh domestic catalyst — sensitive to US response.
      • Cross: DXY strength a headwind; US-UK 10Y supportive.
      • Levels: Resistance 1.3480, Support 1.3440.
    • USD/JPY:
      • Direction: Higher.
      • Domestic (JP): BoJ still slow to tighten; intervention risks persist.
      • Cross: US 10Y driving force; DXY strength adds to upward pressure.
      • Levels: Resistance 159.75, Support 159.20.
    • USD/CAD (Loonie):
      • Direction: Higher.
      • Domestic (CA): No fresh domestic catalyst — sensitive to US response.
      • Cross: DXY strength dominating; US-CA 10Y favors USD upside.
      • Levels: Resistance 1.3850, Support 1.3790.
    • AUD/USD (Aussie):
      • Direction: Lower.
      • Domestic (AU): No fresh domestic catalyst — sensitive to US response.
      • Cross: DXY strength; China growth concerns remain.
      • Levels: Resistance 0.7190, Support 0.7150.
    • NZD/USD (Kiwi):
      • Direction: Lower.
      • Domestic (NZ): No fresh domestic catalyst — sensitive to US response.
      • Cross: DXY strength; risk-off sentiment hurting commodity currencies.
      • Levels: Resistance 0.5990, Support 0.5940.
    • USD/CHF (Swissy):
      • Direction: Higher.
      • Domestic (CH): No fresh domestic catalyst — sensitive to US response.
      • Cross: DXY strength; safe-haven demand muted.
      • Levels: Resistance 0.7870, Support 0.7820.
    • EUR/GBP, EUR/JPY, GBP/JPY:
      • Direction (per cross): Mixed, relative CB stance drives direction.
      • Domestic: ECB vs BoE/BoJ expectations key for cross-pair movements.
      • Cross: Overall DXY strength; risk impacting JPY leg most.
      • Levels: Monitor key levels on a case-by-case basis.
    • XAU (Gold):
      • Direction: Lower.
      • Domestic (asset-specific): Real yields rising limits upside.
      • Cross: DXY strength a major headwind.
      • Levels: Resistance 4580, Support 4520.
    • XAG (Silver):
      • Direction: Mixed.
      • Domestic (asset-specific): Industrial demand supportive, but volatile.
      • Cross: DXY strength weighs; risk appetite fluctuates.
      • Levels: Resistance 7660, Support 7420.
    • WTI / Brent:
      • Direction: Higher.
      • Domestic (asset-specific): Geopolitical tensions support; supply concerns.
      • Cross: DXY strength can limit some upside.
      • Levels: WTI Resistance 91.50, Support 88.50.
    • Copper:
      • Direction: Higher.
      • Domestic (asset-specific): China demand concerns still linger despite recent gains.
      • Cross: Dollar strength may temper upside for now.
      • Levels: Resistance 660, Support 640.
    • SPX:
      • Direction: Sideways to slightly higher.
      • Domestic (US): Data-dependent Fed outlook influences direction.
      • Cross: Risk sentiment driving force; watch VIX reaction.
      • Levels: Futures resistance 7630, cash support 7570.
    • NDX:
      • Direction: Sideways.
      • Domestic (US): Earnings season winding down, focus on macro.
      • Cross: Higher rates sensitivity; VIX affecting valuations.
      • Levels: Resistance 30600, Support 30350.
    • US30 (Dow):
      • Direction: Sideways to slightly higher.
      • Domestic (US): Cyclical sectors showing resilience.
      • Cross: Bond yield direction drives sentiment.
      • Levels: Resistance 51400, Support 50700.
    • UK100 (FTSE):
      • Direction: Lower.
      • Domestic (UK): Sterling weakness supportive, but overall global risk weighs.
      • Cross: Heavily affected by general mood across US/global markets.
      • Levels: Resistance 23450, Support 23300.
    • DAX:
      • Direction: Sideways.
      • Domestic (DE): No fresh domestic catalyst — sensitive to US response.
      • Cross: US tech sector; DXY driving some investor sentiment.
      • Levels: Resistance 25350, Support 25100.
    • Nikkei:
      • Direction: Sideways to slightly higher.
      • Domestic (JP): Consolidation around record highs.
      • Cross: US tech; overall risk appetite important for sentiment.
      • Levels: Resistance 67300, Support 66200.
    • BTC:
      • Direction: Sideways to slightly lower.
      • Domestic (asset-specific): ETF flows influence price.
      • Cross: Heavily linked to DXY; sensitive to tech direction.
      • Levels: Resistance 74100, Support 71800.

    Positioning watch: USD is crowded long at 81st percentile, and JPY remains crowded short (0th percentile) presenting squeeze risks on any dovish pivot from the Fed or a BoJ hawkish surprise. Copper and BTC are crowded long as well, both at 94th, suggesting downside risks on weaker data.

    The pain trade: A weaker-than-expected ISM, combined with Powell hinting at openness to rate cuts, would trigger a sharp rally in bonds and equities, squeezing USD longs and JPY shorts simultaneously.

  • EUR/USD Pressured by Dollar Strength and Data Ahead – Monday, 1 June

    Where we are: EUR/USD is currently trading at 1.1643, down 0.15% on the day. The pair has been confined to a tight intraday range of 1.1642-1.1665. This level is testing Friday’s low and suggests a potential break lower if dollar strength continues through the NY session.

    What’s driving it: The Euro is under pressure as the ECB maintains a mild easing bias. While some ECB policymakers would have supported an April rate hike, the general consensus leans towards a data-dependent approach. Dovish signals are being reinforced by recent Eurozone data. The benign view on inflation expressed by Eurozone consumers is not being matched by investor sentiment, who are seeing that this could cause them to lag behind in their targets compared to their American counterpart. DXY strength, now at 99.06, is exacerbating the Euro’s woes.

    • ECB’s Schnabel highlights the risk of unanchored inflation expectations stemming from geopolitical uncertainties.
    • Eurozone HICP remained at 2%, while Core HICP (excl energy, food) fell by 0.1% to 2.3%.
    • Speculator positioning in the Euro is modestly long, with net non-commercial contracts at +29,426, leaving room for potential long liquidation.

    NY session focus: All eyes are on the US data today, specifically the ISM Manufacturing PMI at 10:00 ET. A stronger-than-expected print (forecast 53.3) could fuel further dollar strength, pushing EUR/USD lower, potentially testing 1.1600. Conversely, a miss could offer a temporary reprieve. Also on tap is FOMC Member Powell Speaks, this could bring about changes in dollar rates. The current trade favors short EUR/USD on rallies. The pain trade is a weak ISM print combined with dovish Powell remarks leading to a dollar sell-off.

  • DAX Momentum Continues on Cooling Inflation – Monday, 1 June

    Snapshot: The DAX is trading at 25298, up 0.80% on the day, buoyed by the recent German HICP print of 2%, a significant drop from the previous 2.6%. This suggests easing inflationary pressures, potentially giving the ECB room to consider future rate cuts.

    • Watch for further upside momentum if the index breaks above the intraday high of 25301.
    • Geopolitical tensions, particularly in the Middle East, remain a risk factor and could trigger a risk-off move.

    Bias into NY: We are cautiously bullish on the DAX into the NY session, driven by the positive inflation data and a relatively stable Bund yield environment; further gains could be capped if the DXY continues its advance above 99.06.

  • Euro/Yen Stalls Below 186.00 on Cautious BoJ Watch – Monday, 1 June

    Snapshot: EUR/JPY trades at 185.73, down -0.05% on the session, consolidating after its recent surge. The market remains sensitive to signals from the Bank of Japan, particularly regarding further policy normalisation. No key data releases are scheduled for today.

    • Watch 186.00; a sustained break would suggest further upside driven by carry appeal.
    • Risk: Any hawkish communication from BoJ officials could trigger a sharp Yen rebound, squeezing EUR/JPY longs.

    Bias into NY: Mildly bullish, contingent on risk appetite remaining firm and no surprises from BoJ whispers. A break above 186.00 targets 186.50, but caution is warranted given intervention risks and the market’s extended positioning.