Inflation Soft & Housing Starts Solid in Quiet Week

Wells Fargo Research Team Wells Fargo

U.S. Review

Inflation Soft & Housing Starts Solid in Quiet Week

A strong print for housing starts in June was the most noteworthy piece of economic news in an otherwise quiet data week. Starts jumped 8.3 percent, while building permits also rose a healthy 7.4 percent.
Import price inflation was subdued in June, although excluding petroleum, prices eked out a gain.
The Leading Economic Index surged 0.6 percent in June, the largest increase since December 2014. Initial jobless claims matched the second-lowest reading of the expansion this past week, another encouraging sign for economic growth in H2.

Global Review

Good Data on the Economy; Weak Data on Inflation

The week started with a slightly better-than-expected result for the Chinese economy in the second quarter, with growth topping expectations at 6.9 percent over a year earlier and matching the rate of growth of the first quarter of the year.
As expected, the ECB kept its policy stance without change but Mario Draghi, the ECB president, sounded a bit more dovish than what markets have been expecting as the monetary institution gets closer to what should be the start of a tightening process.

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Wells Fargo Research Team

Wells Fargo

EUR/USD hits two-day highs near 1.1820

EUR/USD picks up pace and reaches two-day tops around 1.1820 at the end of the week. The pair’s move higher comes on the back of renewed weakness in the US Dollar amid growing talk that the Fed could deliver an interest rate cut as early as March. On the docket, the flash US Consumer Sentiment improves to 57.3 in February.

GBP/USD reclaims 1.3600 and above

GBP/USD reverses two straight days of losses, surpassing the key 1.3600 yardstick on Friday. Cable’s rebound comes as the Greenback slips away from two-week highs in response to some profit-taking mood and speculation of Fed rate cuts. In addition, hawkish comments from the BoE’s Pill are also collaborating with the quid’s improvement.

Gold climbs further, focus is back to 45,000

Gold regains upside traction and surpasses the $4,900 mark per troy ounce at the end of the week, shifting its attention to the critical $5,000 region. The move reflects a shift in risk sentiment, driving flows back towards traditional safe haven assets and supporting the yellow metal.

Crypto Today: Bitcoin, Ethereum, XRP rebound amid risk-off, $2.6 billion liquidation wave

Bitcoin edges up above $65,000 at the time of writing on Friday, as dust from the recent macro-triggered sell-off settles. The leading altcoin, Ethereum, hovers above $1,900, but resistance at $2,000 caps the upside. Meanwhile, Ripple has recorded the largest intraday jump among the three assets, up over 10% to $1.35.

Three scenarios for Japanese Yen ahead of snap election

The latest polls point to a dominant win for the ruling bloc at the upcoming Japanese snap election. The larger Sanae Takaichi’s mandate, the more investors fear faster implementation of tax cuts and spending plans.

XRP rally extends as modest ETF inflows support recovery

Ripple is accelerating its recovery, trading above $1.36 at the time of writing on Friday, as investors adjust their positions following a turbulent week in the broader crypto market. The remittance token is up over 21% from its intraday low of $1.12.