FX News Today
- 10-year Treasury yields closed at 1.950% and the Dow lifted to record highs ahead of today’s holiday in the US, as investors priced in deep central bank easing.
- In Europe, Bund yields are holding steady around -0.39% in opening trade, and Italian yields in particular continue to slide, as investors buy into hopes that under Lagarde’s helm the ECB will take a more benign view on deficit spending and implement further easing to support struggling economies.
- US President Trump once again accused China and Eurozone of currency manipulation and stock markets turned more cautious during the Asian session amid lingering trade concerns and with trading volumes below average as investors wait for the key US jobs report on Friday.
- European stock futures are slightly higher, while US futures are marginally in the red.
- The WTI future is trading at $56.85 per barrel.
Charts of the Day
- USDJPY recovered from post-ADP lows of 107.58, bouncing to 107.82 highs, after failing to test the overnight 6-session low of 107.54. Soft Treasury yields (10-year at 1.95%) have limited upside for the pairing, though another Wall Street rally should contain losses. Activity is likely to wind down early today, as many make their way out the door on today’s Independence Day holiday.
- AUDUSD: The Australian Dollar has outperformed for a second day, presently near highs with a 0.6% gain versus the US buck and a 0.8% advance against the pound, which is the weakest of the main currencies on the day so far. AUD-USD posted a 57-day at 0.7047, extending gains seen from yesterday’s at 0.6956, seen in the immediate wake of the RBA’s rate cut. Markets had mostly priced-in the move, with Aussie money markets having factored in 85% odds for it. Given this, along with some cautiously upbeat remarks on the outlook in RBA Governor Lowe’s statement, and the thawing in US-China tensions, the scene was set for a rally in the Australian Dollar. AUDUSD has support at 0.7017-20.
Main Macro Events Today
- United States – Independence Day
- Retail Sales (EUR, GMT 09:00) – Retail Sales are expected to climb to 1.6% for May, after the 1.5% last month.
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