Market wrap: light data flow, markets dominated by headlines - ANZ

Analysts at ANZ Bank New Zealand Limited ("ANZ") noted that the light data flow saw news headlines dominate market moves.

Key Quotes:

"USD fell against all G10 after Trump tweeted his frustration at USD strength and rising US interest rates."

"News that the BoJ was considering more sustainable policy action in July, led to speculation it will allow the 10-year yield to move higher, sparking a global bear steepening."

"The US 2-year yield was flat with the 10-year up 5.5bps. While the steepening was good for financial stocks, key US equity indices closed broadly unchanged. "

"In Europe, the DAX and CAC 40 closed 1% and 0.4% lower respectively. Oil was up 0.6-1.5% across front end contracts."

"Gold rose 0.7%."

"The Eurozone current account surplus fell €7.2B to €22.4B (sa) in May, driven largely by a €6.0B drop in the primary income surplus. Meanwhile, the German PPI lifted 0.3% m/m in June, in line with market expectations and pushing annual producer price inflation up 0.3%pts to 3%."

"Canadian data printed on the firmer side of market expectations. Retail sales rose 2.0% m/m (mkt: 1.0%; last: -0.9%) with ex-auto sales up 1.4% m/m (mkt: 0.5%; last: 0.2%). Headline inflation came in at 2.5% y/y (mkt: 2.3%) with ex-food and energy up 1.8%."

"Trump once again has criticised the Fed for lifting interest rates, tweeting “China, the European Union and others have been manipulating their currencies and interest rates lower, while the US is raising rates while the dollars gets stronger and stronger with each passing day – taking away our big competitive edge."

"A Reuters report that the BoJ is debating a policy change in July to make its stimulus sustainable saw global yields bear steepen. “If it turns out it would take too long to hit 2 percent inflation, there could be discussions on a policy change,” one source said. "