In today’s briefing:
- DXY Cracks 97: Commodity Stocks in Focus as Dollar Slide Deepens
- HEW: Incentives To Ignore Macro Data
- [IO Technicals 2025/26] Bearish Momentum Intensifies
- CX Daily: CATL’s Bet on Europe Shows Challenges of Recreating Supply Chains Abroad
- [ETP 2025/26] WTI Set for Deepest Weekly Drop Since March 2023; Henry Hub Slides on Tepid Demand
- Asian Equities: EPS Estimate Upgrades Do Drive Share Prices
- Tariff War, Weather Hit Thai Rubber Exports Hard In April
DXY Cracks 97: Commodity Stocks in Focus as Dollar Slide Deepens
- The U.S. Dollar Index (DXY) has fallen sharply to 97.33, down over 10% year-to-date and hitting a fresh 1-year low.
- This decline is being driven by rising expectations of Fed rate cuts, political uncertainty around central bank independence, and a broader shift in global risk appetite.
- Over the past two years, gold miners, aluminum, copper, and diversified metal stocks have shown the strongest inverse correlation with DXY.
HEW: Incentives To Ignore Macro Data
- Rates were repriced lower without new data to justify it. Trump incentivises doves with a possible early Fed Chair decision, and the two FOMC outliers revealed themselves.
- PMIs extended their recovery in the June flash. Mexico and Thailand matched market calls, but the former signalled slower easing and US trade policy risks reduced further.
- Next week lacks central bank decisions, but US payrolls and EA inflation data are critical to perceptions of the outlook, including our contrarian calls for no more cuts.
[IO Technicals 2025/26] Bearish Momentum Intensifies
- Iron ore prices weakened due to rising Australian and Brazilian exports and subdued Chinese demand, while the UK prepares tighter steel import restrictions.
- Rio Tinto and Hancock Prospecting have secured approvals for a $1.6bn joint initiative in Western Australia, expected to produce 31 million tonnes of iron ore annually.
- Prices are still trading beneath critical moving averages, suggesting ongoing downside momentum, while the MACD below its signal line confirms the prevailing bearish trend.
CX Daily: CATL’s Bet on Europe Shows Challenges of Recreating Supply Chains Abroad
- CATL / In Depth: CATL’s bet on Europe shows challenges of recreating supply chains abroad
- Summer Davos /: Increasing incomes key to boosting domestic demand, professor says
- Gold /: China opens first offshore gold vault to attract global investors
[ETP 2025/26] WTI Set for Deepest Weekly Drop Since March 2023; Henry Hub Slides on Tepid Demand
- For the week ending 20/Jun, U.S. crude inventories fell by 5.8m barrels (vs. expectations of a 1.2m barrel decline). Meanwhile, gasoline stockpiles fell more than expected.
- The EIA reported a 96 Bcf storage build, while analysts forecasted an 88 Bcf increase. Storage levels are 6.6% above the five-year average but 6.3% below year-ago levels.
- Shell denied reports of merger talks with BP. TD Cowen raised its price target on Exxon to USD 128, citing its technological edge in resource recovery and strategic deal-making capacity.
Asian Equities: EPS Estimate Upgrades Do Drive Share Prices
- Responding to clients’ queries, we backtest our hypothesis of EPS estimate upgrades driving share prices. We measure price index movements in the sectors with EPS upgrades during the upgrade period.
- Out of 32 market-sectors with EPS upgrades, share prices of 6 declined, that of 1 stayed flat and those of 25 appreciated. Our indicator has a roughly 80% strike rate.
- The cheaper market-sectors appreciated much more than the quantum of EPS upgrades. The Korean sectors and few in Taiwan and ASEAN, notably. For cheap sectors, EPS upgrades are rerating catalysts.
Tariff War, Weather Hit Thai Rubber Exports Hard In April
- Thailand’s rubber export value dips 18.58% MoM in April 2025
- Staggering 43.6% fall in Thai rubber imports value to China
- Rubber producers can now use trees as collateral for loans
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