US stocks continue their bullish ascent amid stagflation risk and tariff uncertainties. The US dollar extends its decline while the Japanese Yen shows strength. Gold eyes a potential minor bounce.
Equities ignore Trump’s “trade tantrum”, JPY strengthens, gold bounces
US stock indices have continued their bullish ascent along a “wall of worry” as the latest US economic data suggests stagflation risk, where the core PCE inflation for May increased to 2.7% y/y, above April’s print of 2.6% and the consensus forecast. Also, US personal spending for May contracted for the first time since January to -0.1% m/m from a 0.2% m/m increase in April, suggesting that tariffs and economic uncertainty may have hampered consumers' appetite.
The S&P 500 (+0.5%), and Nasdaq 100 (+0.4%) scaled to fresh all-time highs last Friday, 27 June, shrugged off US President Trump’s hawkish tariffs rhetoric towards Canada as he planned to halt negotiations with Canada ahead of the 9 July expiration date of the 90-day pause of the global (excluding China) higher reciprocal tariffs in retaliation for the country’s digital services tax, and threatened to impose a new rate this week.
In today’s Asian session, Canada has dropped the digital tax on US firms and is poised to restart trade talks with the US, in turn, boosting risk-on sentiment in global equities. The S&P 500 and Nasdaq 100 E-mini futures extended their gains and recorded intraday rallies of 0.4% and 0.5% respectively at this time of writing.
Bullish momentum has also spilt over to most Asia Pacific benchmark stock indices. Japan’s Nikkei 225 advanced by 0.9%, en route to a fifth consecutive positive session after its range bullish breakout triggered last Wednesday.
Hong Kong’s Hang Seng Index trimmed its early intraday loss of -0.8% to -0.25% supported by a slowdown in contraction seen in China’s NBS Manufacturing PMI for June (actual: 49.7, May: 49.5, consensus: 49.7), and a slight improvement in June’s NBS Services PMI actual: 50.5, May: 50.3, consensus: 50.3). The higher beta Hang Seng TECH Index rose by 0.1%.
The US dollar continues to extend its losses in today’s Asia session after the US Dollar Index has broken down and recorded a weekly close below a key long-term secular support of 97.40 (right now, it is trading down by -0.2% to 97.04), increasing the odds of a multi-week to multi-month US dollar bearish trend.
The prior laggard, the Japanese yen, has finally shown further positive momentum against the US dollar. The JPY is the top-performing major currency against the US dollar at this time of writing, gaining +0.6% where the USD/JPY is now trading at 143.90, probing a medium-term ascending range support from the 22 April 2025 swing low.
After two weeks of corrective decline that led to a loss of -6% in Gold (XAU/USD), short-term technical factors are now supporting a potential minor bounce due to extreme oversold conditions at the US$3,250 key intermediate support, so far it has staged an intraday rally of 0.4% to trade at US$3,287.
Our YouTube video above contains the latest intraday technical analysis on the latest intraday technical analysis on US Wall Street 30, US Nas 100, US SPX 500, Hong Kong 33, Japan 225, Germany 30, EUR/USD, GBP/USD, AUD/USD, USD/JPY, Gold (XAU/USD), and West Texas Oil.
