The XAU/USD chart shows a bearish momentum within a descending channel, indicating a predominant downward trend.       here is potential for a bearish reaction at the first resistance level of 1966.26, leading to a price reversal towards the first support level at 1933.95. Additional support is observed at 1914.16, offering significant buying opportunities. The resistance levels at 1966.26 and 1980.08 present obstacles for upward movement. Monitoring these levels can provide valuable insights for trading opportunities in the XAU/USD market.  

Despite the fact that the European Central Bank has much more reasons to consider lowering interest rates compared to the Federal Reserve, the ECB not only raised the refinancing rate but Lagarde practically stated that there would be another rate hike in July. This decision not only contradicts expectations but also goes against common sense to some extent. Of course, this resulted in the dollar's decline, thereby reducing the pressure caused by its apparent overbought condition. However, the European economy is facing serious difficulties associated with the increased cost of energy resources.   The European industry suffers the most. Many, including in the West, are already openly calling what is happening the deindustrialization of Europe. And a strong dollar may somewhat alleviate this negative trend. So, the decisions and intentions of the ECB are more harmful than beneficial to the European economy. Especially considering that inflation in the euro area is slowing down as fast as in the United States. Today's inflation report should confirm the fact of its slowdown from 7.0% to 6.1%. And don't think that the ECB was unaware of this yesterday because we are talking about final data.   The preliminary assessment was already available two weeks ago. In such a situation, the most reasonable approach would have been not to touch interest rates and observe the developments for at least two or three months.   Frankly speaking, the ECB's actions are raising more and more questions. And this naturally leads to an increase in concerns, which are usually referred to as uncertainty risks. Investors typically try to stay away from such risks. Therefore, the euro's substantial growth, which pulled the pound along, is likely to be unsustainable and probably won't last long. The GBP/USD pair has surged in value by nearly 300 pips since the beginning of the trading week.     This movement has resulted in the extension of the medium-term uptrend. Take note that such an intense price change has triggered a technical signal of the pound's overbought conditions. On the four-hour chart, the RSI is at its highest level since autumn 2022, indicating a technical signal of overbought conditions.   On the same timeframe the Alligator's MAs are headed upwards, which points to an upward cycle. Outlook In this case, speculators are disregarding the overbought status, as evidenced by the sustained momentum and the absence of a proper correction. However, this process cannot persist indefinitely, and sooner or later, there will be a liquidation of long positions, leading to a pullback. Until then, traders will consider the psychological level of 1.3000 as the main resistance level.  

Bank of Japan keeps policy settings unchanged – for now The BoJ has unanimously decided to maintain its ultra-easing monetary policy as it is still looking for clearer signs of sustainable inflation growth. We believe higher-than-expected inflation, a continued solid economic recovery, and growing pressures from the weaker yen will eventually convince the bank to revise its YCC policy in July.   The Bank of Japan's no change decision was very much in line with market expectations The Bank of Japan's (BoJ’s) monetary policy statement hasn’t changed much at all on its view on the growth and inflation outlook and hasn’t given a hint of any exit plans. The BoJ kept its dovish stance by repeating that “the bank will not hesitate to take additional easing measures if necessary”. What is more worth noting, however, is that the BoJ pointed out that wage gains are expected, accompanied by changes in firms’ price and wage-setting behaviour. We believe that this is the change of structural and behavioural disinflation factor that the BoJ has been looking for.   To be precise, the latest labour cash earnings data were disappointing despite the surprisingly solid Shunto (Spring wage negotiations) results. Thus, an improvement in earnings is another factor to watch to gauge the BoJ’s policy action and we will also see how earnings data unfold in the coming months. We believe that rising asset prices are another important factor in sustainable inflation. With recent rallies in Japanese equity markets and the gradual rise in housing prices, the positive wealth effect is likely to keep inflation above the BoJ’s target, in our view.   Dovish comments from Governor Ueda Governor Kazuo Ueda’s comments at the press conference were no different from what the statement suggested. Ueda is concerned that the outlook for wage growth is highly uncertain and wants to see clearer signs of sustainable inflation. There were no hints about future policy adjustments in his comments.   However, we still think that the BoJ can change its YCC policy in July for the following reasons: First, the BoJ is likely to upgrade its inflation forecast in the quarterly outlook report in July. That could more easily justify the BoJ’s policy action. As mentioned previously, we expect inflation to remain higher for longer than expected.   Second, the overall bond market functions have improved, although there have been some fluctuations since December’s YCC band widening, and the market is not testing BoJ’s YCC upper limit of 10Y JGB. Thus, we believe that the market stress has been reduced, and it is a good time for the BoJ to revisit its YCC policy to reflect changes in market conditions.   Third, a weaker yen will likely add more inflationary pressures. If the BoJ continues to maintain its current policy setting, it would risk leaving the BoJ “behind the curve”. We believe that Japan’s economy is recovering solidly compared to other major economies and will continue to outperform in the future. But, if monetary policy fails to reflect this shift of economic fundamentals and the BoJ keeps its dovish policy, then the yen should depreciate even more.Lastly, by the time of the July meeting, the US Federal Reserve will have already decided on monetary policy, and where the UST will be is another factor the BoJ should consider.   From now on, we will be closely watching upcoming data releases such as June Tokyo CPI, labour cash earnings, and the movement in JPY, to see if these give a clearer signal of sustainable inflation.

This report is prepared for the Warsaw Stock Exchange SA within the framework of the Analytical Coverage Support Program 3.0     Event: New production facility finished Yesterday the Company’s management informed about a reception of the occupancy permit for a newly constructed production plant. Moreover, the warehouse and office area in the building BioMaxima bought earlier was finally adapted and the Company started to set up the production and lab equipment. The last stage of the pending investments will be the capacity expansion in another building owned by Biomaxima which is scheduled for 3Q23.   Due to the above mentioned investments the Company’s infrastructure will increase to 6,000 sq m. Expected impact: Neutra     The report is not a recommendation within the meaning of Commission Delegated Regulation (EU) 2016/958 of 9 March 2016 supplementing Regulation (EU) No 596/2014 of the European Parliament and of the Council with regard to regulatory technical standards for technical arrangements for objective presentation of investment recommendations or other information recommending or suggesting an investment strategy and for disclosure of particular interests or indications of conflicts of interest.  

Tesco maintains full year guidance   Since pushing up to 12-month highs back in May the Tesco share price has slipped back a touch, as the rally from the October lows ran into a little bit of profit taking.   The UK's number one supermarket, along with the rest of the sector has come under some criticism in recent weeks for a reluctance to cut prices amidst accusations of price gouging from politicians keen to divert criticism from their roles in the current crisis.   Even if some of these criticisms were valid, looking a little closer they don't stand up to any sort of scrutiny, but these sorts of details don't always resonate as they should in this post truth environment.   Talk of price caps on certain products from politicians keen to be seen to be doing something about the cost-of-living has only served to muddy the waters further as if somehow these will make things better. As with any problem, there's never a situation where a political intervention can't somehow make it worse.     Like most retailers Tesco has had to deal with rising costs, as have its suppliers at a time when food price inflation is trending at levels close to 20%, and headline inflation has only just dropped below 10%. Last year profits fell by 50% as Tesco was forced to absorb increased costs as well as looking to price match thousands of everyday products, with its nimbler competitors Aldi and Lidl.     When Tesco announced its full year numbers back in April the supermarket announced it was locking in the price of 1,000 other everyday products until July 5th, as it continues to increase the pressure on its competitors. Lower Clubcard prices are also available on over 8,000 lines.     Today's Q1 trading update has seen like-for-like sales in UK stores increase by 9% to £10.8bn with group retail revenues increasing by 8.2% to £14.83bn.   Its Booker business also continues to perform well with like for like sales increasing by 8% to £2.27bn.   Fuel was the only area which saw like for like sales decrease to the tune of 15.7% to £1.7bn.   On a positive note for consumers, Tesco did say that there were signs that inflation is starting to ease across the market.   On guidance Tesco remained optimistic that it would be able to deliver the same level of adjusted operating profit, as last year, despite the ongoing pressure on its margins, while keeping retail free cash flow in the region of £1.4bn to £1.8bn.        

JPY: BoJ keeps the yen on the backfoot Last night's Bank of Japan (BoJ) meeting produced few fireworks, with the BoJ leaving all its policy levers and its statement unchanged. This has allowed the Japanese yen to remain the prime victim of higher US interest rates – with USD/JPY now pushing through 141.00. We are currently listening to Governor Kazuo Ueda's press briefing and we think there is a chance that the BoJ does tweak its policy set-up at the 28 July policy meeting, when new forecasts will be released. Until that point, however, USD/JPY may well still bid and should remain in the lead should any US data surprise on the upside. Equally, the yen will lag – and will continue to decline on the cross rates – if this current period of dollar weakness does extend after all.

GBP: Sterling to hold gains into next week's CPI data Sterling continues to hold gains as the market rigidly holds onto aggressive Bank of England tightening expectations. This year sterling's correlation with risk assets had fallen, suggesting perhaps that it should not be at the forefront of a risk rally. However, as above, we think the dollar environment is softening and we do not want to stand in the way of a GBP/USD rally.  Looking at the charts it seems there is 'fresh air' between current levels (1.2750/1.2800) and 1.3000 – suggesting the latter beckons. For EUR/GBP, the hawkish ECB helps strengthen the support at 0.8550, although next week's release of the UK June CPI will probably be the next big driver here, ahead of an expected 25bp BoE rate hike next Thursday.

EUR: Hawkish ECB and better risk environment helps the euro The trade-weighted euro pushed up around 0.2/0.3% yesterday on the hawkish ECB, but the better global growth environment and softer dollar generated a 1% rally in EUR/USD. As our readers hopefully know by now, we are bullish on EUR/USD in the second half, but we are not sure which month exactly the bull trend would take off. Could it be June? The hawkish ECB – especially the upward revision to the 2025 CPI forecast – adds weight to our core house view that the central bank will say hawkish for longer and cut rates later than the Fed. At the same time, it looks like investors are gearing up for another expression of faith in Chinese growth prospects. Expectations are now growing that some fiscal support measures can be announced over the coming weeks to back up the recent monetary easing. This week's important turn-around in USD/CNH looks like an encouraging sign for the pro-cyclical EUR/USD. For EUR/USD today, let us see whether the US data and Fed speakers make much of an impression. In addition, we have four ECB speakers from the more hawkish end of the spectrum. We prefer to back the bullish momentum here and can see EUR/USD pushing on to the 1.1000/1030 region today. Chris Turner   In Norway, Norges Bank (NB) reported the results of a regional survey yesterday: the main takeaway was that price pressures continue to grow. This will ultimately help the central bank build its case for pushing rates beyond 3.50%, even though a much more important input to the NB decision-making process is NOK weakness. The next policy meeting is on Thursday when rates are expected to be raised by 25bp to 3.50%, although at this stage we cannot exclude a surprise 50bp hike.