TRACKRECORD DAILY
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TRACKRECORD DAILY

How Afraid of Inflation should we be?

Inflation is the monster that destroys the stability of civilisations and the cause of many wars and civil unrest. However, the inflation narrative is currently all the popular media can talk about.

MARKET OBSERVATION

One Small Step For Bitcoin, One Giant Leap For Mankind

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DAY AHEAD

The ECB is likely to keep policy unchanged and ECB President Lagarde will likely remain dovish in her press conference after the meeting. German Zew economic sentiment index (Tue) and Eurozone GDP estimates (Wed) may be of interest but is unlikely to move markets.

TRADING PLAN

1. Currencies: Keep short USD and long NZD, & CNH. Resistance for USDCNH is at 6.40–6.42 level, and it is getting stronger by the day. Stay short USD and Long CNH & NZD.

WHAT HAPPENED YESTERDAY

Market movements as of New York Close 9 Jun 2021
  • US 2-yr Bond yield rose 2 basis points to 0.14%. 10-yr yield fell 3 basis points to 1.50%. The market traded in a narrow range as it awaits the US CPI data later today.
  • S&P 500 decreased -0.2% on Wednesday and was unsuccessful yet again at setting new all-time highs. The Nasdaq 100 (+0.03%) and Dow Jones Industrial Average (-0.4%) also closed slightly lower while the Russell 2000 (-0.7%) underperformed.
  • In the healthcare space, Merck (MRK 74.01, +1.64, +2.3%) signed a supply agreement with the U.S. government for a COVID-19 experimental pill. In addition, reports indicated that the government plans to purchase vaccine doses from Pfizer (PFE 39.81, +0.96, +2.5%) and Moderna (MRNA 217.44, +4.44, +2.1%) to donate to the world.

HEADLINES & MARKET IMPACT

U.S. senators push for infrastructure plan that avoids tax hikes

Notable Snippet: A bipartisan group of 10 senators is trying to craft a plan to revitalize U.S. roads and bridges without tax hikes, lawmakers said on Wednesday, though some of President Joe Biden’s fellow Democrats fretted that such an approach on infrastructure legislation would fail. Revamping America’s infrastructure is a high priority for Biden, but his sweeping $1.7 trillion proposal has run into trouble in a Congress that his party only narrowly controls, making Republican support pivotal.

China’s highest producer inflation in over 12 years highlights global price pressures

Notable Snippet: China’s May factory gate prices rose at their fastest annual pace in over 12 years due to surging commodity prices, highlighting global inflation pressures at a time when policymakers are trying to revitalise COVID-hit growth. Investors are increasingly worried pandemic-driven stimulus measures could supercharge global inflation and force central banks to tighten policy, potentially curbing the recovery.

El Salvador becomes first country to make bitcoin legal tender

Notable Snippet: A majority of lawmakers approved a bill, which was proposed by President Nayib Bukele. The law will pave the way for the approval of bitcoin as legal tender in the South American country. The President has backed the cryptocurrency’s use in boosting the economy. El Salvador’s economy relies on remittances and those who are working abroad can send money back home in bitcoins.

SENTIMENT

FX

STOCK INDICES

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