Good morning and welcome to episode 630 of ‘Talking Bull’. In this video/podcast we cover the main headlines and what to expect from the day ahead.
We take a technical look at key markets that are likely to be impacted by today’s events. Also, we participate in a ‘Gun to the head’ challenge where each of us calls a live trade. These will expire at 9pm tonight and we will keep track of the progress over time.
We hope you enjoy it!
For a selection of free educational content, join our Discord server at – https://discord.gg/Db4UWVFvF6
Joe was stopped out on Bitcoin. Steve was 0.25R on side on Gold.
We have included an illustration based on a £1000 account. This will follow the combined return of our morning trades by risking 1% of the trading capital per trade. The 1% risk is a variable monetary amount and will rise and fall based on the success of the calls.
We are currently up 130.79% collectively since we began recording Talking Bull on the 30th October 2019.
ECB’s Lagarde sticks to the script
In comments on Monday, ECB President Lagarde reiterated that the bank intends to increase rates by 25 basis points at the July meeting. She added that price rises are becoming more widespread across sectors and measures of underlying inflation have risen further. She also noted that the bank expects to raise rates again in September.
Fed’s Bullard moderates stance slightly
St Louis Fed President Bullard stated that the economy is slowing to the trend rate of growth as expected due to Fed actions. He added that the central bank must follow through and validate prior forward guidance as there would be the risk of inflation expectations becoming un-anchored if there was no action.
He did, however, consider that there may not be that far to go on quantitative tightening through bond sales.
Waiting for Chair Powell’s comments
Markets will be waiting for Fed Chair Powell’s testimony to Congress on Wednesday with his rhetoric and guidance having an important impact on rate expectations and moves across asset classes.
Market consolidation was the dominant theme on Monday, especially with a US market holiday.
Mann backs more aggressive rate hikes
Bank of England MPC member Mann stated that there signs that inflation in the UK is becoming more embedded and persistent and also had more momentum after government support measures for households. She called for more aggressive tightening, especially as that would reduce the risk that domestic inflation is further boosted by inflation imported via Sterling depreciation.
She was, however, also concerned that there is an increasingly stark trade-off in terms of persistent inflation against deteriorating real income. From a medium-term view, there was the possibility of a rate reversal when domestic supports to demand fade.
RBA expects further rate increases
Reserve Bank of Australia Governor Lowe stated that the bank will discuss a 25 or 50 basis-point rate hike at the early-July policy meeting.
He did add that it was unlikely that market expectations of rates reaching 4% by the end of this year would be realised.
13.15: Bank of England Tenreyro speech
13.30: Canada retail sales
07.00 (Wed): UK consumer prices
Key events over the next week
June 22nd: Fed Chair Powell congressional testimony
Gun to head challenge – Update
Today’s trade idea
Have a great week everyone.
Get award-winning FCA regulated signals and levels on over 30 markets, as well as education resources so you never trade alone.