Daily Market Outlook, June 24, 2026 

Patrick Munnelly, Partner: Market Strategy, Tickmill Group

Munnelly’s Macro Minute — Micron Test, Macro Muted

Markets are no longer trading solely on the peace dividend. Oil below $76/bbl is a major macro relief, and normalising Hormuz traffic should help headline inflation. But AI positioning is crowded, semiconductors are wobbling, and Micron’s earnings now serve as a crucial test of whether the chip rally still has fundamental backing. At the same time, central banks may look through lower headline inflation if trimmed-mean and sticky-price measures remain firm. In the UK, the fiscal-rule debate is shifting from whether rules will be kept to how creatively they might be used — and that matters for gilt supply”

Global markets are still struggling to stabilise after Tuesday’s AI-led selloff, with investors reluctant to rebuild risk ahead of Micron Technology’s earnings. The report has become a key near-term test for semiconductor sentiment, particularly for demand linked to AI memory chips. The MSCI All Country World Index slipped 0.1%, while Asia’s main equity index fell 0.4%, reversing an earlier gain of almost 1%. US equity futures are modestly firmer, suggesting some attempt at stabilisation after Wall Street’s sharp losses, but conviction remains thin.The pressure remains focused on semiconductors. South Korea’s KOSPI attempted to rebound after a historic selloff, helped by Samsung Electronics on reports of a possible share buyback announcement, but the recovery faded. The index remains vulnerable after a rapid unwinding of leveraged positions in chipmakers and AI-linked stocks. Retail enthusiasm is also showing signs of fatigue, especially after regulators warned about leveraged ETFs. That matters because part of the recent KOSPI surge was driven not only by institutional AI demand but also by retail leverage.TSMC fell more than 3% in Taipei, adding pressure to the chip complex after largely avoiding the worst of the previous session’s turmoil. This broadening weakness is important. When AI enthusiasm was strongest, investors treated semiconductor pullbacks as buying opportunities. Now, with positioning crowded and valuations stretched, the market wants confirmation that demand is still accelerating. Micron’s commentary on long-term supply agreements, pricing power and upfront customer payments will therefore carry more weight than usual. The key question is whether AI remains in a boom phase or whether investors have pulled forward too much future optimism. Most long-only investors still see AI as a secular capex cycle rather than a bubble peak, but the short-term positioning problem is real. Crowded trades do not need a fundamental collapse to correct; they only need earnings guidance that is less spectacular than expected. Micron therefore becomes a sentiment checkpoint for the entire memory and AI hardware chain.

Currency and bond markets reflect the cautious mood. The Dollar has climbed to a seven-month high as investors seek safety amid equity volatility. As traders reassess their risk appetite and the growth outlook, Treasuries are also well bid. That is a slightly different tone from earlier in the week, when rising yields were pressuring tech. Today’s bond bid is more defensive, signalling that the market is shifting from inflation-only concerns toward a broader question about whether stretched risk assets can absorb tighter policy expectations. Oil continues to provide macro relief. Brent briefly fell below $76/bbl overnight, leaving it only around 4% above its immediate pre-conflict intraday high. The market is steadily unwinding the Middle East geopolitical risk premium as tanker traffic through the Strait of Hormuz returns toward normal following the provisional US-Iran peace deal. Inventories remain low, so the downside is not unlimited, but the normalisation of shipping flows has eased fears of a major supply disruption.President Trump’s social media pressure on oil companies to pass lower crude prices through to pump prices reinforces the political importance of the move. If fuel prices gradually normalise, that could take some heat out of central-bank rate-hike expectations in coming weeks. The key is timing. Headline inflation can respond quickly to lower energy, but central banks will want evidence that the shock has not embedded itself in core prices, especially services.

Australia’s May CPI data are a useful reminder of that distinction. Headline inflation of 4.0% y/y was weaker than expected, but the trimmed mean at 3.6% y/y was an upside surprise. That difference may become increasingly important for global markets if Warsh’s Fed task force elevates trimmed-mean inflation as a more prominent policy guide. Falling energy can soften headline inflation, but policymakers may focus more heavily on underlying measures that strip out volatile components. That is also why the Fed narrative has not fully turned dovish despite the fall in oil. If the Committee increasingly emphasises sticky or trimmed-mean measures, markets may not get the easing impulse they expect from cheaper energy alone. Lower crude is helpful, but it is not the same as a broad-based disinflation signal.

The UK fiscal story is again relevant for gilts. A Guardian article reported that a Burnham adviser has called for billions of pounds of infrastructure borrowing. On inspection, the approach appears similar to the “fiscal illusions” route flagged previously: using the existing fiscal rules to create room for materially higher investment while remaining formally compliant. The crucial point for markets is that staying within the rules does not necessarily mean keeping gilt supply capped. The mechanism rests on the structure of the UK fiscal framework. Investment spending sits outside the primary current-budget rule, and the debt rule uses Public Sector Net Financial Liabilities. If investment is structured through financial assets or designated public financial institutions, it may be treated more favourably in the fiscal arithmetic. But the government would still need to raise cash in the gilt market. So the accounting treatment may limit the rule impact, while the funding requirement still rises.For gilt investors, that distinction matters. Political commitments to the fiscal rules are reassuring only if they also imply discipline on borrowing and issuance. If a future Burnham government uses the rules more flexibly to finance infrastructure, the result could be higher gilt supply even without a formal fiscal-rule breach. References to the British Business Bank and the National Wealth Fund remain the most important indicators to monitor.

The European macro data were lacklustre. Flash PMIs across the euro area and the UK still point to weak activity, with services and composite indices below 50 in both cases. Manufacturing looks relatively better, but even there the pace of expansion slowed on the month. Some of the apparent resilience in manufacturing may reflect inventory building ahead of potential supply-chain disruption from the Middle East conflict rather than genuine final-demand strength. That inventory effect could still help Q2 GDP at the margin, but it is not a clean signal of economic momentum. It also means that recent de-escalation in the Middle East may not yet be fully captured in the June flash surveys. Some rebound in sentiment may only appear in the final June readings or the flash July data. Upward revisions should therefore not be a surprise if lower oil and calmer shipping conditions feed through quickly. The more encouraging part of the PMI release was on inflation. Input and output price indices slowed across the surveys, in some cases sharply. Manufacturing input-price levels remain elevated by historical standards, but the direction is better. If lower energy prices continue to filter through, this could support a modest improvement in sentiment next month and reduce some pressure on central banks. Still, the growth picture remains fragile. Services weakness is a concern because it is typically more labour-intensive and more closely linked to domestic demand. Manufacturing inventory building can flatter near-term output, but it is not a durable growth engine. Europe and the UK therefore need the lower-energy impulse to translate into real-income support and confidence, not just a temporary cost relief.

Overnight Headlines

• German Business Confidence Poised To Rise On Hopes Of Peace

• BoJ Opinion Summary Affirms Hike Stance As Inflation Risks Mount

• Australia’s Core Inflation Accelerates, Keeping RBA On Alert

• Dollar At 13-Month High As Hike Bets, Stock Rout Boost Demand

• Bessent Signals Confidence In Warsh, Sees Inflation Coming Down

• US Senate Votes To End Iran War In Rebuke To Trump

• Trump Touts Iran Inspection Deal As Tehran Disputes Terms

• US-Iranian Trash Talk Is Disrupting Peace Negotiations

• China Plans Postwar Aid For Iran, With Eye On Energy Supply

• Oil Holds Drop As More Tankers Cross Hormuz After Peace Talks

• UAE Oil Exports Surge To 85% Of Pre-War Levels, IEA Says

• China Is Luring The World To The Yuan And Hobbling Western Sanctions

• Bank Of Korea Says Higher Rates Needed Amid Housing, Debt Risks

• Russia Pressures Belarus In Bid To Open New Front In Ukraine War

• Nvidia’s Banned AI Chips Double In Price On China’s Black Market

• Google-Parent Alphabet To Replace Verizon In Dow Jones

• FedEx Revenue Rises On Growth In Package Yields, Volume

FX Options Expiries For 10am New York Cut 

(1BLN+ represents larger expiries and is more magnetic when trading within the daily ATR.)

• EUR/USD: 1.1550 (EU2.51b), 1.1500 (EU2.02b), 1.1600 (EU1.09b)

• USD/JPY: 160.50 ($1.31b), 161.50 ($1.05b), 161.20 ($886.8m)

• AUD/USD: 0.7160 (AUD688.9m), 0.7050 (AUD519m), 0.7130 (AUD460.9m)

• USD/CNY: 6.8200 ($1.1b), 6.7400 ($900m), 6.7800 ($820.2m)

• GBP/USD: 1.2950 (GBP300.4m)

• USD/BRL: 5.0500 ($572.9m), 5.2000 ($403.8m), 5.2200 ($350.1m)

• NZD/USD: 0.5675 (NZD407.5m), 0.5925 (NZD402.5m), 0.5855 (NZD354.8m)

• EUR/GBP: 0.8690 (EU452.2m)

• USD/MXN: 17.35 ($774.6m), 17.70 ($330.6m), 17.20 ($320m)

CFTC Positions as of June 22

• Speculators have ramped up their net short positions in various Treasury futures, with the CBOT US 5-year Treasury futures seeing an increase of 30,015 contracts, bringing the total to 1,350,177. Meanwhile, the CBOT US 10-year Treasury futures net short position rose by 47,275 contracts, reaching 911,082. The CBOT US 2-year Treasury futures also experienced a significant uptick, with a net short position climbing by 50,669 contracts to hit 1,270,507. Additionally, the CBOT US UltraBond Treasury futures saw a rise of 3,096 contracts in their net short position, totaling 321,827. On the other hand, there's been a slight reduction in the net short position for CBOT US Treasury bonds futures, which decreased by 3,754 contracts to 159,551.

• In the cryptocurrency realm, Bitcoin's net long position stands at 3,475 contracts. The Swiss franc is currently facing a net short position of -40,058 contracts, while the British pound has a larger net short position of -71,585 contracts. On a more positive note, the Euro boasts a net long position of 34,353 contracts. The Japanese yen is not performing as well, with a net short position of -150,132 contracts.

• In the equity markets, speculators have increased their net short position in S&P 500 CME by 64,644 contracts, bringing the total to 501,690. Conversely, equity fund managers have raised their net long position in S&P 500 CME by 3,319 contracts, now totalling 983,431.

Technical & Trade Views

SP500 - 7450 weekly bull/bear level

• Daily VWAP Bearish

• Weekly VWAP Bullish>Bearish

• Above 7580 Target 7700

• Below 7400 Target 7185

DXY - 100 weekly bull/bear level

• Daily VWAP Bullish

• Weekly VWAP Bullish

• Above 100 Target 102.50

• Below 99.40 Target 98.40

EURUSD - 1.15 weekly bull/bear level

• Daily VWAP Bearish

• Weekly VWAP Bearish

• Above 1.15 Target 1.1780

• Below 1.1450 Target 1.1270

GBPUSD - 1.33 weekly line in the sand

• Daily VWAP Bearish

• Weekly VWAP Bearish

• Above 1.35 Target 1.3580

• Below 1.33 Target 1.3050

USDJPY - 160.50 weekly line in the sand 

• Daily VWAP Bullish

• Weekly VWAP Bullish

• Above 160.50 Target 162.20

• Below 159Target 157.95

XAUUSD - 4100 weekly line in the sand

• Daily VWAP Bearish

• Weekly VWAP Bearish

• Above 4200 Target 4500

• Below 4150 Target 3569

BTCUSD - 60.5 weekly line in the sand

• Daily VWAP Bearish

• Weekly VWAP Bearish

• Above 67.2k Target 70.5k

• Below 60.5k Target 52.2k