Daily Market Outlook, June 11, 2025 

Patrick Munnelly, Partner: Market Strategy, Tickmill Group

Munnelly’s Macro Minute…

Asian stocks advanced following positive remarks from US and Chinese officials during two days of negotiations aimed at alleviating trade conflicts. Notably, shares in mainland China performed particularly well. Asia’s regional stock index rose by 0.3%, with Hong Kong's 1% increase and mainland China's 0.9% rise marking the largest gains in the area. US equity futures fell by 0.3% as investors sought further information from the discussions in London. Treasuries stabilised ahead of the US inflation report scheduled for Wednesday. Treasuries are also facing a 10-year auction, with attention on the proportion acquired by indirect bidders, including foreign central banks. In May, these entities secured a significant 71% of the sale, whereas primary dealers only received 8.9%. A similar outcome would be market positive. The dollar index strengthened as gold prices inched higher. US and Chinese negotiators reported a rapid de-escalation of trade tensions, reaching an initial agreement on the implementation of the consensus achieved in Geneva. Although the complete details of the agreement are not yet public, US negotiators conveyed optimism that matters regarding the shipment of rare earth minerals and magnets will be addressed as part of this framework. In related tariff news, a federal appeals court has permitted Trump to proceed with his global tariffs. Shares related to Chinese rare earths and magnets rose after the preliminary agreement between the US and China to alleviate trade tensions.

The UK government is set to publish its Spending Review today. While typically considered a secondary political event for market participants, this edition is expected to draw heightened attention due to the current focus on fiscal policy constraints. Normally, budgets determine the overall size of the spending "pie" that markets must finance, while Spending Reviews focus on how that pie is divided, often highlighting political priorities. However, this time, the Spending Review carries more weight. It will outline departmental allocations for day-to-day spending from 2026-27 to 2028-29, as well as capital spending for an additional year. According to the Institute for Fiscal Studies (IFS), average real-term spending growth over the three years is projected at +1.2% annually. Yet, with health and defence receiving above-average growth due to prioritisation, other unprotected departments are likely to face real-term cuts. The key market risk lies in the potential political fallout if the Spending Review’s decisions are poorly received. Any signs of increased opinion poll pressure or reports of internal government disputes over funding allocations could amplify challenges in crafting a feasible Autumn Budget while preserving fiscal headroom. Investors should remain alert to these dynamics.

Stateside, the US May CPI is anticipated to edge higher, with market analysts projecting a 0.2% month-over-month increase, translating to a 2.5% year-over-year rate for the headline figure, up from 2.3% in April. However, this rise is expected to stem from an unfavourable base effect rather than a broader increase in price pressures. Tariff impacts are not anticipated to appear in the data yet. Such an outcome is unlikely to significantly influence the immediate Federal Reserve policy outlook, which remains on hold until later in the year—if rate cuts happen at all. Consequently, market sensitivity to a downside surprise should also be limited, given the prevailing uncertainties surrounding Fed and market expectations. Nevertheless, the report could still prove intriguing. Business survey data suggests firms have been quick to pass on price increases, while consumer inflation expectations have also risen. Additionally, trade data indicates minimal stockpiling (apart from pharmaceuticals and gold), and Chinese exports to the US have sharply declined since the implementation of tariffs. This decline could create a gap that prices might fill. Furthermore, Nowcast data signals the potential for an upside surprise, with the Cleveland Fed’s measure—typically a reliable indicator—pointing to a 2.7% year-over-year headline rate and a 3.0% core rate. The market is likely to react sensitively to such an outcome.

Overnight Headlines

  • US Inflation Expected To Tick Higher On Tariff Pass-Through

  • US, China Officials Agree On Framework To Reduce Trade Tensions

  • Trump Tariffs Remain In Force As US Appeals Court Extends Pause

  • Fed Watch: Bessent Emerges As Potential Powell Replacement

  • UK Chancellor Reeves To Unveil £2.1T Budget For ‘National Renewal’

  • OPEC Says Oil Demand Growth Will Persist, No Peak In Sight

  • Canada’s Economy In ‘Suspended Animation’ Amid Trade War

  • Trump May Withhold Education Funding To California Over Policy Feud

  • Blackstone Eyes $500B Expansion In European Private Capital Market

  • Meta Plans $15B Investment In Scale AI To Challenge Rivals

  • Musk Teases Driverless Tesla Test Ahead Of Austin Robotaxi Launch

  • Trump Team Nears Deal With Mexico To Cap Steel Tariffs

  • RBNZ Confirms Adrian Orr Resigned Over Internal Funding Dispute

  • Societe Generale Launches First Major Dollar-Pegged Stablecoin

  • Peter Thiel-Backed Bullish Crypto Exchange Files For Wall Street IPO

FX Options Expiries For 10am New York Cut 

(1BLN+ represents larger expiries, more magnetic when trading within daily ATR)

  • EUR/USD: 1.1300 (2.9BLN), 1.1350 (697M), 1.1375 (633M), 1.1400 (2.8BLN)

  • 1.1440-50 (815M), 1.1475-80 (464M), 1.1500 (2.2BLN)...

  • USD/CHF: 0.8210 (350M), 0.8250 (440M)

  • EUR/CHF: 0.9400-10 (581M). EUR/GBP: 0.8470 (347M)

  • GBP/USD: 1.3450 (757M), 1.3600-05 (646M)

  • AUD/USD: 0.6450 (290M), 0.6495-0.6500 (800M), 0.6530-35 (401M)

  • NZD/USD: 0.6100 (353M) , 0.6145 (348M). AUD/NZD: 1.0800 (300M)

  • USD/CAD: 1.3760 (867M), 1.3800 (650M)

  • USD/JPY: 144.30 (831M), 144.50-55 (431M), 144.75 (277M), 145.00 (1.4BLN)

  • 145.50 (247M)

  • EUR/JPY: 160.00 (1.1BLN), 163.00 (295M), 165.50 (471M)

CFTC Data As Of 6/6/25

  • Speculators have increased their net short position in CBOT US Treasury bonds futures by 48,483 contracts, bringing the total to 102,373. They also reduced their net short position in CBOT US Ultrabond Treasury futures by 5,029 contracts, now totaling 228,443. Additionally, there was a decrease of 64,348 contracts in the net short position for CBOT US 10-year Treasury futures, which now stands at 705,256 contracts. On the other hand, the net short position for CBOT US 5-year Treasury futures increased by 63,299 contracts to reach 2,396,536. The net short position for CBOT US 2-year Treasury futures also grew, rising by 24,022 contracts to 1,143,925. 

  • Equity fund managers have cut their net long position in the S&P 500 CME by 40,048 contracts, resulting in a total of 814,481 contracts. Conversely, equity fund speculators have raised their net short position on the S&P 500 CME by 27,860 contracts, now at 285,326. 

  • The net long position for the Japanese yen is at 151,149 contracts, while the euro has a net long position of 82,764 contracts, and the British pound holds a net long position of 35,215 contracts. The Swiss franc is currently at a net short position of -26,066 contracts, and Bitcoin has a net short position of -2,312 contracts.

Technical & Trade Views

SP500 Pivot 5900

  • Daily VWAP bullish

  • Weekly VWAP bullish

  • Above 5900 target 6100

  • Below 5800 target 5650

EURUSD Pivot 1.12

  • Daily VWAP bearish

  • Weekly VWAP bullish 

  • Above 1.11 target 1.19

  • Below 1.11 target 1.0950

GBPUSD Pivot 1.34

  • Daily VWAP bearish

  • Weekly VWAP bullish 

  • Above 1.34 target 1.38

  • Below 1.3350 target 1.32

USDJPY Pivot 147

  • Daily VWAP bullish

  • Weekly VWAP bullish

  • Above 147.10 target 148.26

  • Below 146.53 target 139

XAUUSD Pivot 3365

  • Daily VWAP bearish

  • Weekly VWAP bullish 

  • Above 3410 target 3600

  • Below 3240 target 3000

BTCUSD Pivot 105k

  • Daily VWAP bullish

  • Weekly VWAP bullish 

  • Above 105k target 118k

  • Below 103k target 100k