Here is what you need to know on Monday, July 4:
Following Friday's volatile action, markets stay relatively quiet on Monday. Stock and bond markets in the US will be closed in observance of the Fourth of July holiday. The European economic docket will feature Producer Price Index (PPI) data for July and the Bank of Canada will release its Business Outlook Survey in the second half of the day. The US Dollar Index, which gained nearly 1% last week, was last seen moving sideways slightly above 105.00 and US stock index futures were posting small losses.
The data published by Eurostat showed on Friday that the Core Harmonised Index of Consumer Prices (HICP) edged lower to 3.7% on a yearly basis in June from 3.8% in July. Later in the day, the US data revealed that the ISM Manufacturing PMI dropped to 53 in June from 56.1 in May. The Employment and New Orders components of the ISM's survey came in below 50, showing monthly contractions. The benchmark 10-year US Treasury bond yield broke below 3% after this data and ended up losing nearly 8% on a weekly basis.
USD/CHF came under modest bearish pressure and was last seen trading below 0.9600 after the data from Switzerland showed that the Consumer Price Index climbed to 3.4% on a yearly basis in June from 2.9% in May.
EUR/USD moves sideways below 1.0450 early Monday. The pair lost more than 100 pips last week with investors reassessing the European Central Bank's policy outlook amid mixed inflation data.
GBP/USD is trading modestly higher on the day above 1.2100 in the European morning. Over the weekend, foreign ministers of Germany and Ireland said in a joint statement there was no legal or political justification for the UK to unilaterally change the terms of the Northern Ireland Protocol.
USD/JPY clings to gains near 135.50 early Monday after having closed the last two days of the previous week in negative territory. Kazuo Momma, a former top official in charge of monetary policy at the Bank of Japan (BOJ), told Bloomberg TV on Monday that he expects the BOJ to keep its easy monetary policy for many quarters to come.
Gold dropped to its lowest level since January at $1,784 on Friday but managed to stage a rebound amid plunging US yields. XAU/USD moves sideways in a relatively tight range near $1,810 in the early European session.
Bitcoin failed to reclaim $20,000 on Sunday and was last seen losing nearly 2% on the day at $19,100. Ethereum fluctuated in a tight channel over the weekend but came in under renewed bearish pressure at the start of the week. ETH/USD is edging lower toward $1,000, losing 2.5% on a daily basis.
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