The swinging June showed many potentially positive signs: Monthly Reviews

 The key headlines:

SPX500 set five price records within a month

The U.S. dollar rose around 3% in June

The RBA, BoE, BoC, Fed, ECB and BoJ made their interest rate decisions

Gold set the worst monthly loss in five years

Oil rose over 8% in 30 days

Bitcoin saw the lack of institutional demand.

Gold

Monthly change: XAUUSD -6.65%

From oil to grains, most commodities were at their highs this month, except for the gold. XAUUSD began declining from the start of the month on concerns that faster economic growth would increase inflation and major central banks would withdraw stimuli. However, the pair rebounded at the weak U.S. NFP data, and the price exceeded 1,900 USD. Although, the talk of monetary tightening sent the currency pair to a two-month low of 1,750 USD. The yellow metal finished June at the level of early May at 1,770 USD.

Gold witnessed its worst monthly loss in almost five years due to the Fed's hawkish words. The important point is that neither stimulus tapering nor rate hikes are likely to happen anytime soon. Fed's executives kept commenting on the words of the central bank officials since that FOMC meeting. Every hawkish tone from Fed officials lowered XAUUSD price more than a dovish comment would have lifted.

Traders raised their bullish positions in COMEX gold in the week to 23 March, the U.S. Commodity Futures Trading Commission said.

Currencies

Monthly change: EURUSD -2.94%, GBPUSD -2.78%, USDJPY +2.18%, USDCAD +3.72%, AUDUSD -3.94%

DXY ended June at 92.427. This month, the index gained about 3% after the unexpectedly hawkish shift from the Fed at its meeting. The unconventional part is that the ten-year benchmark U.S.Treasury bonds are still yielding 1.48% despite all events. This month was meant to be eventful for the major central banks to declare their monetary policy intentions. None of them, except for the Fed, did it. That's why June 2021 will be remembered as the 'swinging' month for the financial markets. Taking a monthly trading review in EURUSD, the currency pair was downbeat by the Fed's hawkish tone of voice and the absence of any clear steps towards stimuli from ECB. The currency pair ended the month near 1.184, the level of early April this year.

The Bank of England left its policy settings unchanged, as was anticipated. The GBPUSD pair came under intense bearish pressure after that, and the regulator remained speechless towards Fed's statement. The pair lost almost 3% during the month, closing at 1.383.

The Bank of Canada left its key rate unchanged. The oil-oriented currency pair was among the few majors, finishing the month with a positive gain. The USDCAD pair closed in June near 1.24, adding 3% a month.

The Reserve Bank of Australia (RBA) is expected to hike rates next November, well ahead of the 2024 timeline. The AUDUSD pair fell by almost 3% after that to 0.7470 and finished the month at that level ten days later. The Bank of Japan left its policy measures unchanged, as was expected. The USDJPY pair went higher on renewed greenback strength and the Japanese yen pressure and climbed above 111.

Indices

Monthly change: SPX500 +3.21%

SPX500 repeated its record-high on June for five consecutive times. The index finished the month at 4,297.50 USD and gained more than 14% year-to-date. The index also posted twenty new week highs from the year's fifty-two total.

The U.S. Senate had accepted President Biden's infrastructure plan, so the equities of the material and industrial sectors pushed up higher, followed by other stocks. Meanwhile, the investors' optimism about the index performance in the following quarters eased, as they realized that the excessive bullish trend could signal the market of its overbought status.

Bank of America did its calculations, stating that Biden's spending plan took the label of global fiscal and monetary stimulus over the last fifteen months to 30,5 trillion USD. This change means the U.S. inflation is now annualising 8%, compared to an average of 3% over the previous century.

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