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June Market Commentary

by Thornbridge

June Market Commentary by Upper Park Trading Limited – A Thornbridge Appointed Representative

June Market Commentary by Upper Park Trading Limited – A Thornbridge Appointed Representative

The Bank of Japan chose to defer their QE reduction plans until the July meeting, disappointing Yen bulls. Although rhetoric since has emphasised the room to make a substantial adjustment, and to consider the policy rate, the Yen slowly but steadily weakened during the month, even during episodes of declining UST and Bund yields. The ECB delivered their long flagged first rate cut, but heavily cautioned that any further moves required further inflation progress.

The Fed held rates steady and pushed much of their forecast for rate cuts into 2025, despite receiving a very well-behaved core CPI print on the same day. In sum, G3 central banks continue to wrestle with having stated they are data dependent, rather than expressing confidence in their forecast paths over time, while the data is delivering more noise than signal – growth is slowing gently, not yet fast enough to lower core inflation sufficiently. The SNB in contrast does not use forward guidance, and simply cut its rates 25bp alongside a lowered inflation forecast.

Published by: Felix Wigdahl

Felix is a member of the investment funds team and is involved in portfolio construction, trade execution, trade surveillance and monitoring.

Author: Thornbridge

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