Price Pressures Still Building

Wells Fargo Research Team Wells Fargo

U.S. Review

Price Pressures Still Building

In the midst of tighter labor markets and backlogged supply chains, inflation continued its upward climb in June. Tariff implementation adds upside risk to inflation.
Producer prices for final demand rose 0.3 percent last month, pushing the year-over-year rate up to 3.4 percent. Similarly, the CPI came in at 2.9 percent on a year-over-year basis in June, marking the strongest pace in over six years.
After what was otherwise a strong week for inflation data, import prices declined 0.4 percent in June.

Global Review

The BoC Tightens Amid Escalating Trade Tensions

In a week dominated by trade war headlines, the Bank of Canada (BoC) elected to hike its main policy rate 25 basis points for the fourth time in the past year
In the United Kingdom, data from the production side of the economy broadly signaled a rebound in economic growth in Q2, which should allow the Bank of England (BoE) to raise its main policy rate at its August meeting.
The big news this week was the United States’ decision to initiate a process that could lead to another $200 billion in tariffs on imports from China.

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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.