Investors are watching a large hedged-equity fund's quarterly refresh of its options positions and quarter-end rebalancing by portfolio managers to potentially influence US stock moves as the first half of the year winds down this week.

The nearly $16 billion JPMorgan Hedged Equity Fund, which holds a basket of S&P 500 stocks along with options on the benchmark index, is expected to roll its options positions on Friday. While the trade is anticipated by many market participants, it can exacerbate or suppress daily stock market moves, especially during times of poor market liquidity, analysts said.

For now, the trade may be helping suppress volatility in stocks. That is because the March 31 refresh of the fund's positions involved about 120,000 S&P 500 options contracts set to expire on June 30, including the sale of nearly 40,000 S&P 500 options contracts with a strike price of 4,320, just below where the index is trading today. (RTRS - Continue Reading) 

China's major state-owned banks were seen selling dollars in the offshore spot foreign exchange market on Tuesday, four sources with knowledge of the matter said, suggesting authorities wanted to slow the pace of the yuan's recent slide.

Such state bank dollar selling appeared as the offshore yuan weakened towards the psychologically important 7.25 per dollar level, two of the sources said. "The 7.25 (yuan per dollar) level remains a key threshold," said one of them, adding a breach of the level could quickly send the yuan to lows last seen in 2022.

The yuan's value onshore hit a trough of 7.3280 per dollar in November, levels last seen during the 2008 global financial crisis, while the offshore yuan dropped to a record low of 7.3746. (RTRS - Continue Reading)

Inflation in UK shops dipped this month, offering a glimmer of hope to ministers and central bankers struggling to contain the country’s cost-of-living crisis.

Shop price inflation slowed to 8.4% in June, the British Retail Consortium said Tuesday, down from a peak of 9% in May. It was the sharpest decline since prices in shops started to rise at the end of 2021 following a period of deflation during the pandemic. Food price inflation eased for the second consecutive month to 14.6%, down from 15.4%, led by grocers cutting the prices of basics like milk, cheese, and eggs.

“Households up and down the country will welcome the easing of shop price inflation in June,” said Helen Dickinson, chief executive officer at the BRC. “If the current situation continues, food inflation should drop to single digits later this year.” (BBG - Continue Reading)