Headlines:
- USD/JPY lingers at three-week lows after Bessent chimes in on BOJ policy
- Fed policymakers still seemingly on the fence about a September move
- Fed’s Daly says a large rate cut next month doesn’t seem warranted
- France’s Macron: Trump expressed willingness to provide Ukraine with security guarantees
- UK Q2 preliminary GDP +0.3% vs +0.1% q/q expected
- UK June monthly GDP +0.4% vs +0.1% m/m expected
- Eurozone Q2 GDP second estimate +0.1% vs +0.1% q/q prelim
- France July final CPI +1.0% vs +1.0% y/y prelim
- Switzerland July producer and import prices -0.2% vs -0.1% m/m prior
Markets:
- JPY leads, NZD lags on the day
- European equities higher; S&P 500 futures flat
- US 10-year yields down 3.2 bps to 4.207%
- Gold flat at $3,353.96
- WTI crude up 0.4% to $62.91
- Bitcoin down 1.7% to $120,805
It was a quiet session for the most part as traders and investors are gearing towards more US data to come in the next two days. The first set will be later via the US PPI figures as well as the weekly initial jobless claims.
In the run up to that, the dollar is keeping more mixed as it holds steadier against the likes of the euro and aussie but down against the yen. EUR/USD is down 0.2% to 1.1685 with large option expiries at 1.1700 anchoring the pair after having started the day above 1.1700. Meanwhile, USD/JPY is down 0.5% to 146.57 with the low earlier touching 146.21 as lower bond yields are also factoring into the equation alongside some comments from US Treasury secretary Bessent on BOJ policy earlier.
The antipodes are the laggards with AUD/USD down 0.3% to 0.6520 and NZD/USD down 0.5% to 0.5945 currently.
In the equities space, US futures are more muted in waiting on more data later and the retail sales tomorrow. Fed policymakers are keeping things in check as well, at least pushing back on a 50 bps rate cut. As for a 25 bps rate cut, there’s still no clear sides just yet but markets are continuing to stay all in on that for now.
European stocks are benefiting from the better mood in Wall Street yesterday, with regional indices holding solid gains on the session. The DAX has now gone on to wipe out the drop on 31 July and 1 August as such this week.
In other markets, we’re seeing traders keep their appetite in check as well. Gold is flattish while cryptocurrencies are backing away from earlier highs a little. Ethereum remains buoyed, hovering near $4,800 while Bitcoin is getting knocked back after clipping the $124,000 mark earlier to just under $121,000 currently.
This article was written by Justin Low at investinglive.com.