Here is what you need to know for July 19:
During the Asian session, eyes will be on the early data in New Zealand CPI that will be released just after the rollover in thin market conditions and when spreads will be irregular, making it a tricky event to trade. However, with the Reserve Bank of New Zealand's (RBNZ) inflation target being around the midpoint of 2%, Statistics New Zealand’s quarterly Consumer Price Index (CPI) publication is still of high significance. The trend in consumer prices tends to influence RBNZ’s interest rates decision, which in turn, heavily impacts the NZD valuation. Acceleration in inflation could lead to a faster tightening of the rates by the RBNZ and vice-versa. Actual figures beating forecasts render NZD bullish.
Meanwhile, the US Dollar rose from a 15-month low against a basket of currencies on Tuesday after core Retail Sales saw strong gains in June. Core sales showed resilience and increased 0.6% in June. Data for May was also revised slightly up to show core Retail Sales increasing 0.3% instead of the previously reported 0.2%. Two-year Treasury yields reversed a 9bp fall to a 2bp rise, while 2-year bund yields fell 9.4bp.
EUR/USD was down in late New York trade but overall little changed after failing to breakout of last week's highs again although hitting 1.12750, the highest since Feb. 2022 although failed to hold bullish above the 61.8% Fibo of the 2021-22 collapse at 1.1271.
USD/JPY was higher after Ueda dashed hopes the BoJ would raise its JGB yield cap next Friday. Traders await Japan's CPI on Thursday, although Ueda's stance is more key. the pair is now supported and eyes a bullish correction into the sell-off.
The Pound was pressured in what has been considered a highly overbought market and fell 0.25% vs. the Greenback while UK gilt yields were falling. Traders will be looking to Wednesday's UK core CPI which will be key with respect to the Bank of England, BoE, hiking by either 25bp or 50bp at August's meeting. GBP/USD is testing below 1.3050 and correcting into the daily trend's in-the-money longs.
Elsewhere, Bitcoin, BTC/USD, was down $136.88 or 0.46% to $29794.96 in its worst three-day stretch since the three days ending July 7, 2023 when it fell 1.78%. It is down 1.74% over this three-day period. Gold prices rose to a six-week high after the United States reported Retail Sales rose less than expected last month. Crude oil and gasoline prices rallied sharply and garnered support from Alpha BBL's prediction that Wednesday's weekly EIA report for the week of July 14 will show crude supplies at Cushing, the delivery point of WTI futures, falling -3.3 million bbl. WTI rallied to a high of $75.92.
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