Pre-Market Report – Thursday 27 June: ASX to drop. SPI Futures down 85 points (-1.09%).

US equities closed broadly higher overnight following a choppy day of trade. The Dow edged up 16 points (+0.04%). Up 72 points at best. Down 203 points at worst. The S&P 500 rose 0.16% and is on pace to enter the second half of the year with a gain of ~15% YTD. The tech-heavy NASDAQ advanced 0.49%, locking in the gain before big tech got hit too hard in late trade after Micron Technology’s outlook missed expectations. US small caps Russell 2000 eased 0.12%, and Wall Street’s Fear Index, the VIX, fell 2.26%. US treasuries rose amid higher inflation data in other countries. 10Y yield +8.2bps, 2Y yield +0.9bps, and the 5Y $70bn note auction was well received. Pressure is mounting on the Japanese yen, sinking to a 38-year low against the USD as the wide interest rate differentials between the two economies favour the greenback. Markets are speculating that Japanese officials will intervene but will likely wait until after the PCE reading on Friday. A top currency official Masato Kanda warned on Monday that authorities were standing by, ready to intervene 24 hours a day if necessary.

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