Treasury yields spiked on the stronger than expected CPI and jobless claims data, but have already slipped from the highs. The 2-year rate, more sensitive to the Fed outlook, jumped to 1.858%, but has dipped back to 1.832%. The 10-year ran up to 2.09% and is back to 2.073%. Meanwhile, US equities continue to extended yesterday’s gains, as the market basks in the glow of Chair Powell’s appearance yesterday. The USA30 is leading the way with a 0.3% increase, the USA500 has risen 0.1% and the UAS100 is also up 0.1% in pre-market trading.

The market is still pricing in a 25 bp rate cut at the end of the month.




Cable is showing the biggest movement on the day out of the pair Dollar pairings, presently a little off highs but still showing a 0.5% gain. The move reflects about half general Pound firmness and about half general Dollar weakness. A 4bp-plus rise in the 10-year Gilt yield, taking it back above the prevailing 0.75% repo rate, has been concomitant with Sterling’s ascent today. BoE Governor Carney reaffirmed earlier that UK banks would be able to withstand a no-deal Brexit scenario (which still warning of material economic disruption in such an eventuality).

GBPUSD posted a 6-day peak at 1.2571, extending the rebound from the 27-month low seen earlier in the week at 1.2439. On the break of the 3-session Resistance at 1.2571, GBPUSD could face Resistance at 1.2590-1.2600 area. GBPUSD has support at 1.2520-1.2530.

US Data Review

US initial jobless claims dropped 13k to 209k in the July 5 week after falling 7k to 222k in the June 29 week (revised from 221k). The bigger than forecast decline was likely impacted by the July 4 holiday. The 4-week moving average fell to 219.25k from 222.5k. Continuing claims climbed 27k to 1,723k in the week ended June 29 after rising 2k to 1,686k in the week ended June 22. The initial claims number is better than projected, consistent with the strength seen in the June jobs report.

US CPI rose 0.1% in June, while the core rose 0.3%, hotter than expected. There were no revisions to the 0.1% gains in May. On a 12-month basis, headline prices slowed to a 1.6% y/y pace versus 1.8% y/y, and excluding food and energy, the pace increased to 2.1% y/y versus 2.0% y/y. There was strength in apparel prices whice climbed 1.1% following unchanged. Housing costs rose 0.3% versus the prior 0.1% gain, with medical care up 0.3% too, as it did in May. Services rose 0.2% versus 0.1%. Food/beverage prices edged up 0.1% after a prior 0.3% gain. Energy prices dropped 2.3% versus -0.6%, while transportation costs slid -0.7% from -0.3%. Commodities were down -0.2% from unchanged.

Disclaimer: Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of purchase or sale of any financial instrument.

Analysis feed

FXStreet Trading Signals now available!

Access to real-time signals, community and guidance now!

Latest Forex Analysis

Editors’ Picks

EUR/USD chops around amid end-of-month flows, ahead of Trump

EUR/USD is battling 1.11, close to the two-month highs amid choppy trading. Hopes for a fiscal boost in Europe and mixed satisfactory data have supported the currency pair. , Sino-American tensions are rising and investors await President Trump's China announcement.


GBP/USD advances amid US dollar weakness, shrugging off concerns

GBP/USD is trading above 1.23, edging higher amid US dollar weakness and Britain's gradual reopening. Intensifying Sino-American tensions and the Brexit impasse are ignored. 


Cryptocurrencies: $348M in matured derivatives boost the market

Futures and options contracts' expiration brings a wave of volatility to the crypto market. Ethereum takes advantage and attacks resistances in the market dominance chart, Bitcoin goes back. Ripple disappoints despite regaining the third place in market capitalization.

Read more

Canada's economy falls by 8.2% annualized in Q1, better than expected, USD/CAD shakes

The Canadian economy squeezed by an annualized rate of 8.2% in the first quarter of 2020, better than -10% expected. Quarterly, Gross Domestic Product (GDP) squeezed by 2.1%. Most of the downfall occurred in March, with a drop of 7.2%, better than 8.5% projected. 

Read more

WTI drops 4% and eyes $32 mark amid risk-off, weakening demand

The selling pressure around WTI (July futures on Nymex) accelerates following the break below the 33 level, as bears now target the 32 support zone heading into the key US macro data and US President Donald Trump’s response to the Hong Kong issue.

Oil News

Forex Majors