FX News Today
European Fixed Income Outlook: 10-year Bund yields moved higher at the open but already fell back slightly to currently 0.352%, while 10-year Treasury yields and 10-year JGB yields are up 0.7 bp and 0.5 bp respectively. Stock market sentiment remained upbeat in Asia and UK Futures moved higher with US Futures overnight, underpinned by a weaker Pound. Trump continues to ruffle feathers in Europe saying that he told UK PM May that her Brexit proposal could “kill” any future US trade deal, while suggesting that Boris Johnson, who stepped down as foreign secretary over May’s “soft Brexit” plans, would make a good PM. Backing then for the hard line Brexiteers in the UK who many speculate are setting out to oust May. European Stock Futures are still moving higher for now, but a hard Brexit looks increasingly likely is would hit not just the UK economy. Today’s calendar BoE’s Cunliffe, due to speak at 11:30 GMT.
FX Update: USDJPY rallied to a fresh 6-month high, of 112.77, as most Global Stock markets continued to rally, buoyed by a strong Global Economy and expectations for a solid Q2 corporate earnings reporting season. Chinese markets still underperformed, however, along with the Australian share market, on concerns about worsening Sino-US trade relations. The weakness in the Yen in turn drove an outperformance in Japanese Stock markets. Outside the case for USDJPY, the Dollar itself has been mixed. EURUSD has drifted towards 1.1650 and yesterday’s 1-week low at 1.1649, and Cable edged out a 10-day low of 1.3162, while the Dollar lost a little ground to the Australian Dollar and other Dollar bloc units.
Charts of the Day
Main Macro Events Today
MPC Member Cunliffe Speech
Prelim UoM Consumer Sentiment – Expectations – a small move up to 98.5 in early-July from 98.2 in June.
FOMC Member Bostic Speech
Fed Monetary Policy Report
Support and Resistance level
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EUR/USD edges lower toward 1.0700 post-US PCE
EUR/USD stays under modest bearish pressure but manages to hold above 1.0700 in the American session on Friday. The US Dollar (USD) gathers strength against its rivals after the stronger-than-forecast PCE inflation data, not allowing the pair to gain traction.
GBP/USD retreats to 1.2500 on renewed USD strength
GBP/USD lost its traction and turned negative on the day near 1.2500. Following the stronger-than-expected PCE inflation readings from the US, the USD stays resilient and makes it difficult for the pair to gather recovery momentum.
Gold struggles to hold above $2,350 following US inflation
Gold turned south and declined toward $2,340, erasing a large portion of its daily gains, as the USD benefited from PCE inflation data. The benchmark 10-year US yield, however, stays in negative territory and helps XAU/USD limit its losses.
Bitcoin Weekly Forecast: BTC’s next breakout could propel it to $80,000 Premium
Bitcoin’s recent price consolidation could be nearing its end as technical indicators and on-chain metrics suggest a potential upward breakout. However, this move would not be straightforward and could punish impatient investors.
Week ahead – Hawkish risk as Fed and NFP on tap, Eurozone data eyed too
Fed meets on Wednesday as US inflation stays elevated. Will Friday’s jobs report bring relief or more angst for the markets? Eurozone flash GDP and CPI numbers in focus for the Euro.