Synopsis:

Nomura expects no change in the Bank of Japan’s policy rate at the June 16–17 monetary policy meeting. While the BoJ continues to evaluate reducing JGB purchases, any changes are likely to be modest and postponed until April 2026. Governor Ueda is expected to maintain a cautious tone, avoiding firm guidance given trade policy uncertainties and limited inflation clarity.

Key Points:

No Rate Change Expected:

• BoJ is widely expected to keep its policy rate unchanged next week.

• Rate policy and JGB purchase reductions serve distinct goals and should be viewed independently.

JGB Purchase Strategy:

• BoJ is reportedly considering slower JGB purchase reductions from April 2026.

• Reluctance remains to consolidate maturity brackets, especially in the super-long segment, in order to preserve market-driven rate formation.

Governor Ueda’s Press Conference:

• Unlikely to provide new economic or inflation insights given limited data on tariff impacts.

• A shift in tone may only occur if the US–Japan summit at the G7 yields a surprise trade breakthrough.

Communication Caution:

• BoJ’s communication strategy remains conservative, especially in light of ongoing global policy uncertainty.

• Expect continuity in policy guidance barring external shocks or new data.

Conclusion:

Nomura anticipates a hold from the BoJ in June, with no rate change and a cautious approach to asset purchase reductions. While the pace of JGB tapering may slow from 2026, the central bank is unlikely to alter its core messaging or operational structure in the near term, especially ahead of key global trade developments.

• GBP$ holds 0.4% gain to 1.3591 in NY afternoon, Thurs range 1.3623-1.3525

• Pair surged to 2025 high at 1.3623 after US PPI, jobless claims hint at softer US growth view

• Sterling testing 2025 highs after on-target PPI, rising jobless claims nL6N3SF0MP

• UST long-end yields dip 5-7bp; LSEG's IRPR sees deeper Fed cuts by Dec 2025 FOMC

• Market focus shifts to US retails sales Jun 17, UK CPI/RPI Jun 18

• GBP$ res 1.3623 Thursday's 2025 high, 1.3659 rising upper 30-d Bolli, 1.3749 Jan 10 2022 wkly high

GBP$ Chart:


(Paul.Spirgel is a Reuters market analyst. The views expressed are his own)

Synopsis:

Credit Agricole identifies three key pressures undermining the US dollar: dovish Fed rate expectations, renewed debate over the USD’s reserve status, and escalating trade tensions ahead of the July tariff deadline. While structural USD dominance remains intact, near-term sentiment is fragile.

Key Points:

1. Fed Rate Cut Expectations Rise:

• A second soft inflation print has led markets to fully price in two 25bp cuts by year-end.

• Credit Agricole’s economists caution that tariffs have yet to fully feed into CPI as firms deplete pre-Liberation Day inventories.

• The Fed is still expected to hold steady next week, favoring a wait-and-see stance.

2. EUR Reserve Currency Momentum – Still Premature:

• The ECB’s recent report acknowledged rising EUR internationalization.

• However, structural hurdles—lack of full banking, savings, and investment union—limit the euro’s near-term challenge to USD dominance.

• Credit Agricole sees no imminent threat to the USD’s reserve currency role.

3. Trade War Risks Resurface:

• President Trump has signaled he will issue letters on foreign tariff levels, reviving fears of renewed trade escalation.

• With the 9 July deadline for the reciprocal tariff pause approaching, market confidence that trade tensions have peaked is faltering.

Conclusion:

The USD faces near-term pressure from dovish rate expectations, fragile reserve currency sentiment, and resurgent trade risks. While Credit Agricole remains skeptical of structural de-dollarization, the current environment presents tactical headwinds for the greenback, particularly as the July tariff deadline looms.

(Updates)

• Shares of gold miners rise, tracking higher bullion prices [GOL/]

• Spot gold rises 1.1% to $3,389.51/ounce, after hitting its highest level since June 5 earlier in the day

• Gold price rise steered by simmering Middle East tensions and cooler U.S. economic data, which fuelled fresh bets on Federal Reserve rate cuts

• Top miners Newmont up ~4% and Barrick Mining

gains 3.5%

• U.S.-listed shares of South African miners Gold Fields

gain 3.7%, Harmony Gold up 4.2%, Sibanye Stillwater up 3.5% and AngloGold Ashanti rise 6.6%

• Canadian miners Agnico Eagle Mines gains 2.6% and Kinross Gold rises 2.4%
(Reporting by Sumit Saha in Bengaluru)

Synopsis:

Morgan Stanley forecasts a sharp US slowdown beginning late 2025, driven by tariffs and immigration restrictions, with inflation peaking before growth weakens. The Fed is expected to stay on hold through 2025, with easing beginning in 2026. Meanwhile, the euro area sees subdued growth and falling inflation, prompting more ECB cuts. China faces the largest hit, with modest stimulus failing to prevent a tariff-driven deceleration and persistent deflation.

Key Points:

United States:

• Growth slows sharply: from 2.5% in 2024 (Q4/Q4) to just 1.0% in 2025 and 2026.

• Inflation surge precedes growth drag: core PCE to peak at 4.5% q/q saar in Q3 2025.

• Tariffs and tighter immigration policies stall the economy by late 2025.

• Fed remains on hold through 2025; easing resumes in March 2026 with 175bps in cuts by year-end.

Euro Area:

• Growth hovers around 1.0%, constrained by weaker consumption and exports.

• Euro strength versus the USD weighs on inflation, pushing it below the ECB’s target.

• ECB continues easing, taking policy rates to 1.50% by December 2025—below neutral.

Japan:

• Nominal GDP reflation continues, supported by resilient consumption.

• Inflation moderates as JPY appreciation tempers import costs.

• BoJ stays on hold in 2024, avoiding further hikes due to growth risks and stronger yen.

China:

• Expected to see the steepest slowdown among major economies.

• Modest, supply-oriented fiscal expansion likely insufficient to counter tariff shock.

• Real GDP growth forecast 0.5pp lower in 2025 vs. 2024.

• Deflation persists: GDP deflator seen between -0.5% and -1% throughout the period.

Conclusion:

Morgan Stanley sees a global policy divergence into 2025–26, with the US entering stagflationary territory and delaying easing, while the ECB and BoJ lean more dovish. China, facing external trade shocks and weak domestic stimulus, risks prolonged deflation. Currency and policy dynamics will increasingly reflect these macro divergences.

• Profit-taking on dollar shorts helps deflate cable from 1.3623 to 1.3588

• 1.3623 was 40-month peak after dollar fell on U.S. PPI, jobless claims data

• That peak is 98 pips above the weak UK April GDP data-spurred Ldn am low

• GBP/USD was around 1.3588 when the UK GDP data was released at 0600 GMT

• British goods exports to U.S. suffered record fall in April on Trump tariffs

• Cable resistance levels beyond 1.3623 include 1.3643 (Feb 2022 top) and 1.37

GBPUSD

(Robert Howard is a Reuters market analyst. The views expressed are his own)

Synopsis:

SocGen notes a structural shift in how USD/JPY responds to interest rates. While the pair once tracked long-term US yields closely, the focus has shifted toward short-term rate differentials, particularly in light of potential BoJ normalization and Fed easing. The evolving nature of this correlation underscores a new phase in FX pricing dynamics.

Key Points:

Changing Correlations:

• Historically, USD/JPY showed an unusually strong link with US 10-year yields.

• Recently, that correlation has weakened, with relative short-term yield differentials gaining influence.

Market Focus Shifting to Short End:

• FX markets are placing greater weight on front-end rate expectations.

• Long-end yields are losing relevance for USD/JPY pricing as policy divergence becomes the primary driver.

Implications of BoJ and Fed Policy:

• With the BoJ slowly moving toward normalization, short-dated JPY yields are becoming more relevant.

• Meanwhile, the Fed’s expected easing path remains the counterweight, keeping upward pressure on USD/JPY.

Broader FX Takeaway:

• The FX market appears to be recalibrating its rate sensitivities, favoring relative short-term rates over absolute long-end yields.

• This may reflect a structural evolution in market behavior post-pandemic and amid ongoing policy realignment.

Conclusion:

SocGen suggests that USD/JPY is increasingly a function of relative short-term policy expectations rather than long-term yield levels. The pair remains biased higher as Fed-BoJ policy divergence widens, but the key going forward will be how decisively each central bank acts on the short end of their curves.

Synopsis:

BofA highlights consistent seasonal patterns across key macro assets from June through August. Historical trends favor gold upside, modest DXY weakness, and lower US 10Y yields, suggesting a summer backdrop that typically leans dovish for USD and bullish for duration and precious metals.

Key Points:

Gold – Seasonal Tailwind:

• From June to August, gold has shown a consistent upward bias:

  • Since 1975: +1.6% average and +1.1% median return

  • Since 2015: +2.5% average and +1.1% median return

• Typical pattern: consolidation in June followed by rallies in July and August

DXY – Sideways to Slightly Negative:

• Dollar index tends to be rangebound and marginally negative over the summer:

  • Since 1972 and 2015, both average and median returns are modestly below zero

• Seasonal trend suggests limited upside in the absence of major catalysts

US 10Y Yield – Bias Toward Lower Rates:

• Treasury yields typically soften during summer months:

  • Since 1963: average move of -7bps, median -30bps

  • Since 2015: average move of -13bps, median -6bps

• Pattern favors duration trades during June–August window

Conclusion:

BofA’s seasonal analysis reinforces a familiar macro summer playbook: gold strength, slight DXY softness, and lower yields. These trends suggest a modestly risk-averse seasonal tone, favoring precious metals and fixed income over USD strength through late summer.

• Dollar selling fuels cable rise from 1.3525 to 1.3598 (high since June 5)

• USD index falls to lowest level since April 2022

• 1.3525 was intra-day low after pound fell on weak UK April GDP data

• Resistance levels beyond 1.3600 include 1.3616 and 1.3643

• 1.3616 was 40-month high on June 5. 1.3643 was February 2022 high

• Bbg-Tudor Jones says Trump to pick 'uber dovish' Fed chair; USD to fall 10%

GBPUSD

(Robert Howard is a Reuters market analyst. The views expressed are his own)

• U.S.-listed shares of gold miners rise premarket, tracking higher bullion prices [GOL/]

• Spot gold rises 0.2% to $3,360.73/ounce, after hitting its highest level since June 5 earlier in the day

• Gold price rise driven by softer U.S. inflation data that strengthened expectations of Federal Reserve rate cuts this year, while investors look to another set of inflation data for further direction

• Top miners Newmont up 1.1% and Barrick Mining

up marginally

• South African miners Gold Fields gains 3%, Harmony Gold up 2.2% and AngloGold Ashanti rises 3.1%

• Canadian miners Agnico Eagle Mines gains ~1% and Kinross Gold rises marginally
(Reporting by Sumit Saha in Bengaluru)

• 1-month expiry 25 delta EUR/USD risk reversals paid 1-billion euro's a leg

• Option gives holder the right to buy EUR and sell USD at expiry

• Volatility premium for upside over downside strikes was 0.6 (EUR call v put)

• Although its a volatility trade it flags the direction traders fear most

• The direction that is expected to boost EUR/USD volatility and fuel FX moves

• But remember, huge existing triggers will add hurdles for EUR/USD bulls

• Option implied volatility higher with spot - 1-week includes U.S. Fed
EUR/USD FXO implied volatility


EUR/USD option 25 delta risk reversals

(Richard Pace is a Reuters market analyst. The views expressed are his own)

June 12 (Reuters) - They say that pride comes before a fall, and that is certainly the case for Britain's finance minister Rachel Reeves and the pound when it comes to UK gross domestic product data.

Having referenced Britain's 0.7% first quarter GDP growth when unveiling the British government's spending plans on Wednesday, Reeves said Thursday's April UK GDP number was "clearly disappointing".

It showed Britain's economy shrank by 0.3% in April - the biggest monthly drop for 18 months.

April's GDP miss came 48 hours after soft UK labour data, and increases the probability of a dovish interest rate hold from the Bank of England next week (June 19) followed by a 25 basis point cut to 4.0% in August.

It also depressed the pound to a five-week low against the euro, 1.1747, with GBP/USD falling more than half-a-cent to an intra-day low of 1.3525.

Related comments:
GBPEUR

(Robert Howard is a Reuters market analyst. The views expressed are his own)

• Cable falls to 1.3557 as pound weakens on worse than expected UK GDP data

• Down 0.3% in April vs minus 0.1% forecast (UK economy grew by 0.7% in Q1)

• 1.3592 was one-week for GBP/USD on dollar selling in Asia, pre-UK GDP data

• UK GDP miss is boost for doves advocating BoE interest rate cut in August

• BoE is expected to keep Bank Rate at 4.25% next week; 7-2 or 6-3 vote likely

• Pound down to five-week low vs euro on April's UK GDP data miss; 1.1765

GBPUSD

(Robert Howard is a Reuters market analyst. The views expressed are his own)

• EUR/USD topside barrier/trigger options popular over recent months

• Reverse-knock-outs (RKO) at the fore - triggers above Aprils 1.1572 peak

• RKO's took advantage of 5-year high EUR call over put premium

• That premium offered a significant discount to regular vanilla EUR calls

• Consequently there are masses of topside triggers in play from 1.1600

• Triggers will add to resistance, but potentially fuel volatility if breached

• Triggers typically gather at big figure levels and 50 pip intervals

• Near term - there are some huge vanilla FX option strike expiries Thursday

• Related comment
EUR=EBS

(Richard Pace is a Reuters market analyst. The views expressed are his own)

• EUR/USD is overbought at 1.1532 peak 20-day Bollinger Bands

• Pair is above the 1.1470 top of the 20-month bands

• Traders have been buying and adding to bullish bets since April

• The euro has been perceived safer than the US during trade war

• Global reserve currency is safest asset in a truly risk averse situation

• Rising tensions with Iran could underpin U.S. currency

• Higher oil weighs EUR/USD, Brent hit $71/bbl this week $13/bbl above May low

•
EURUSD

(Jeremy Boulton is a Reuters market analyst. The views expressed are his own)

• Up 0.25% with the U.S. dollar off 0.25%, falling early on geopolitics

• Iran threatened US bases in a conflict - US to reduce Middle East personnel

• Risk off in Asia, E-mini S&P -0.35%, Nikkei -0.7%, STOXX 50 -0.75%

• Euro trades as a safe-haven at present, amid the turmoil in the US

• Charts - daily momentum studies, 5, 10 & 21-day moving averages rise

• 21-day Bollinger bands climb - daily charts retain a topside bias

• Yesterday's 1.1406 low then Friday's 1.1372 base are initial supports

• 1.1537 upper 21-day Bolli, then the 1.1572 2025 high are first resistance

• 1.1500 4.469 BLN, 1.1525 1.683 BLN, and 1.1550 949mln close Jun 12 strikes
Andy

(Andrew Spencer is a Reuters market analyst. The views expressed are his own.)

• AUD/USD sits +9.8% from its Apr 9, 0.5910 low, as U.S. asset anxiety builds

• Pair has chalked up a long series of higher highs/higher lows since mid-Apr

• Needs break of major 0.6550 resistance to extend rally longer-term

• Stop-loss buying above resistance zone would accentuate move if breached

• Details emerge on U.S.-CN trade framework, CN tariffs set at 55%

• U.S. civil unrest, debt & tariff concerns will continue to weigh on USD

• U.S. jobless claims & PPI data due Thur, Michigan consumer surveys Fri

• Range early Asia 0.6490-0.6511, support 0.6480 0.6390, resistance 0.6550
AUD Daily 200-DMA & Resistance Levels

(James Connell is a Reuters market analyst. The views expressed are his own.)

• Trades up 0.35% in Asia, with the U.S. dollar down 0.35%, USD/JPY -0.5%

• EUR bid on safe-haven flows with risk appetite under pressure

• E-mini S&P -0.3%, Nikkei -0.75%, AsiaxJP -0.25%, STOXX 50 -0.6%

• Iran threatened US bases in a conflict - US to reduce Middle East personnel

• Charts - daily momentum studies, plus 5, 10 & 21-day moving averages rise

• 21-day Bollinger bands climb - daily charts retain a topside bias

• Yesterday's 1.1406 low then Friday's 1.1372 base are initial supports

• 1.1537 upper 21-day Bolli, then the 1.1572 2025 high are first resistance

• 1.1500 4.469 BLN, 1.1525 1.683 BLN, and 1.1550 949mln close Jun 12 strikes
Andy

(Andrew Spencer is a Reuters market analyst. The views expressed are his own.)

• +0.2% with the USD off 0.15%, after closing +0.35%, with EUR/GBP +0.45%

• Chaos in the U.S as protests spread prompts safe-haven flows into Europe

• UK's Reeves sets out over 2 tln pounds of spending to revive the government

• UK surveyors report the weakest house price growth in nearly a year - RICS

• Charts - mixed 5, 10, & 21-day moving averages and momentum signals

• 21-day Bollinger bands contract - the daily signals show no strong bias

• Last week's 1.3616 2025 high, then the 1.3749 2022 high are first resistance

• 1.3478 21 DMA and then 1.3417 May 29th base are the initial supports

• A close below the 1.3478 21 DMA would be a bearish signalAndy Click here

(Andrew Spencer is a Reuters market analyst. The views expressed are his own.)

• +0.2% after closing up 0.55% with the USD off 0.45%, after soft inflation

• Amid the riot chaos in the U.S. as safe-haven flows support the Euro

• Tariffs could be the spur to remove barriers that the European Union needs

• EU, Britain seal post-Brexit deal easing contentious Gibraltar border flow

• Charts - neutral daily momentum studies, 5, 10 & 21-day moving averages rise

• 21-day Bollinger bands climb - daily charts retain a topside bias

• Yesterday's 1.1406 low then Friday's 1.1372 base are initial supports

• 1.1534 upper 21-day Bolli, then the 1.1572 2025 high are first resistance

• 1.1500 4.469 BLN and 1.1525 1.683 BLN are the close major Jun 12 strikes
Andy

(Andrew Spencer is a Reuters market analyst. The views expressed are his own.)

• AUD/USD softens late after hitting 0.6546 high on below forecast U.S. CPI

• U.S. May core CPI +0.1% m/m, +2.8% y/y (poll +0.3%, +2.9% respectively)

• AUD recoils from key 0.6550 resistance zone at first attempt

• Pair now pushing hourly lower Bollinger band, looks oversold short-term

• Details emerge on U.S.-CN trade framework, CN tariffs set at 55% in totality

• U.S. civil unrest, debt & tariff concerns will continue to weigh on USD

• Overnight range 0.6496-0.6546, support 0.6480 0.6390, resistance 0.6550
AUD Hourly Bollinger Study


AUD Daily 200-DMA & Major Resistance Levels

(James Connell is a Reuters market analyst. The views expressed are his own.)

Synopsis:

ING flags the Canadian dollar as one of its least preferred G10 currencies, despite its strong recent performance. While firmer domestic data supported a BoC hold in June, structural growth concerns, trade headwinds, and underpriced rate cut risks weigh on the CAD outlook, particularly in non-USD crosses.

Key Points:

Short-Term Support from Data:

• CAD has been among the G10’s top performers recently, driven by upside surprises in growth and inflation data.

• This supported the Bank of Canada's decision to hold rates on June 4.

Limited Appeal Beyond USD/CAD:

• While USD/CAD may drift lower amid softer USD demand, CAD looks weak relative to other G10 currencies.

• ING sees poor risk/reward for CAD in cross-currency trades.

Trade and Growth Headwinds:

• New US metal tariffs disproportionately impact Canadian exporters.

• No signs of renewed high-level trade talks add to the pressure.

• Domestic growth outlook remains fragile, with risks skewed to the downside.

BoC Easing Underpriced:

• ING expects the BoC could cut rates as early as July, ahead of market expectations.

• Markets are only pricing in 8bp for July and 15bp for September, leaving room for a dovish repricing of the CAD curve.

Conclusion:

ING maintains a bearish stance on CAD, viewing its recent strength as short-lived. Structural growth risks, trade vulnerability, and underpriced BoC rate cut expectations make the loonie one of ING’s least attractive G10 currencies, especially outside the USD/CAD pair.

• GBP% firm in NY afternoon, +0.5% at 1.3562; Wednesday range 1.3564-1.3466

• Pair rallied off NorAm lows after US CPI downside miss spurs dovish Fed tones

• UST yield slide after solid UST 10-yr auction aids USD dip

• LSEG's IRPR pricing 80% chance for -25bp in Sept, -50bp by the Dec 2025 FOMC

• UK GDP/output data Thurs, main event will be UK CPI, Fed presser on Jun 18

• Res 1.3582 daily high Jun 9, 1.3648 upper 30d Bolli, 1.3749 Jan 3 2022 wkly high

• Supt 1.3537 the 200-HMA, 1.3466 Wednesday low, 1.3417 daily low May 29

GBP Chart:


(Paul.Spirgel is a Reuters market analyst. The views expressed are his own)

• NY opened near 1.1440 after 1.1406 traded on EBS overnight, pair dipped early

• Dip was bought however as US yields , US$ traded downward

• Below estimate May CPI weighed down yields, US$ which rallied EUR/USD

• Tighter spreads helped lift EUR/USD, 1.14965 traded

• Pair hit a 2-month high and traded up +0.58% late which had techs lean bullish

• Rising RSIs, 10-DMA support, rally following May doji are bull signals

• US weekly jobless claims, May PPI are data risks in the US Thursday
eurusd


(Christopher Romano is a Reuters market analyst. The views expressed are his own)