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09.06.202315:01 Forex Analysis & Reviews: US premarket on June 9, 2023: stock market rally pauses

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US stock index futures traded slightly higher following yesterday's rally. The US dollar weakened against risky assets amid rising expectations that the Federal Reserve was nearing the end of its rate hike cycle. S&P 500 futures edged up by 0.1%, while the NASDAQ gained around 0.3%.

Exchange Rates 09.06.2023 analysis

In premarket trading, shares of Tesla Inc. jumped by 4.5% following news that General Motors Co. is joining Tesla's charging network. GM stock also saw a 3.5% increase.

Investors are maintaining a cautious stance as they await the policy decisions from the Federal Reserve and the European Central Bank next week. Recent unexpected rate hikes by several central banks have sparked rumors that borrowing costs may remain elevated for a longer period than previously anticipated. Furthermore, the recent US data showing a cooling labor market has suggested that the Fed is likely to pause the rate hikes at its June meeting.

There is increased macroeconomic uncertainty as inflation remains high. However, market participants generally agree that the Fed's interest rate has already peaked, although a higher consumer price index could trigger a new cycle of rate hikes. The Fed is expected to remain open to adjustments as needed.

Treasury bond yields rose on Friday, with the yield on the 10-year bond reaching 3.75%. Traders are currently assessing the probability of a Fed rate hike next week at around 30%. The possibility of a hike in July is estimated at nearly 90%.

The Nikkei 225 surged by 2.4%, marking its ninth consecutive week of gains and the longest winning streak in over five years. European stock indexes declined.

The Turkish lira continued its decline against the US dollar, hitting another low and extending its weekly drop to 11%. President Recep Tayyip Erdogan has finalized key appointments in the economic team, signaling a shift toward a more traditional policy approach.

The oil market remains calm, and gold has advanced slightly but is still trading within a sideways range.

Exchange Rates 09.06.2023 analysis

On the technical side, demand for the S&P 500 remains steady. Bulls have an opportunity to establish an upward trend, but they will need to hold on to $4,290. A breakout above this level could lead to a surge towards $4,320. Bulls will also need to maintain control over $4,370 to strengthen the bull market. However, if risk appetite declines and Fed officials make hawkish comments, bullish traders must defend the support levels around $4,255 and $4,230. A breakout below these levels would push the index back to $4,175, potentially opening the way towards $4,143.

Desarrollado por un Jakub Novak
experto de análisis de InstaForex
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