Macron loses parliamentary majority

Macron faces tough battle for control of parliament as France votesThe euro has largely shrugged off the results of France’s parliamentary election on Sunday. The result was the loss of the absolute majority in the lower house for Macron’s allies. That will water down his ambitions in his second term. The numbers aren’t complete yet but his alliance is on track to win 234 seats, well short of the 289 needed for a majority.

Yen weakness creeps in as the BOJ fallout continues

The relief valve for last week’s frenzied trading was the Bank of Japan decision on Friday. It was a week where it felt like anything was possible after the Fed 75 bps hike and the surprise 50 bps from the Swiss National Bank.

But Kuroda and the BOJ kept their hand steady, leaving policy unchanged. The yen had rallied more than 200 pips on nerves ahead of the decision but gave it all back afterwards. That momentum is continuing today as all major global currencies make gains against the yen as Tokyo begins the trading week. Risk sentiment is also positive with S&P 500 futures up 25 points.

With that, USD/JPY is up 32 pips to 135.27. That puts it within striking distance of last Tuesday’s 24-year high of 135.60. If that level gives way it will accelerate yen selling and we could see a rapid squeeze higher as we chew into that late-90s top of 147.63.

USDJPY daily chart June 20
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