The USD is lower to start the US trading session. Japan had higher GDP released overnight which has helped their currency (weakened the USD). The EURUSD has trended to the upside with little in the way of corrections in trading today. That move took the price above the 100 hour MA at 1.1662 and back toward resistance “around” 1.1700. The price earlier this week extended above that area only to fail. The GBPUSD is higher too (only modestly), but is running into initial resistance at 1.3561. There is a swing area between 1.3576 to 1.35918 that stalled the rallies on Wednesday and Thursday, before rotating back to the downside.
There is a full slate of economic data to be released at 8:30 AM ET including the NY Fed Manufacturing for August (0.00 vs 5.50 last month), Import (0.0% vs 0.1% last month) and export prices (+0.1% vs 0.5% last month) for the month of July, and Retail Sales (est 0.5% est vs 0.6% last month). The Canada Manufacturing Sales data for June will also be released at 0.4% est vs -0.9% last month).
Fed’s Goolsbee will be speaking later today. He spoke yesterday as well and was neutral.
Yesterday, the PPI was released and defined estimats around 0.26% to 0.27% increase in the core PCE later this month.
The Fed is still expected to cut by 25 basis points (94%) . Before the data, there was a 6% chance of a 50 bp cut. The estimates for cuts later in the year have moved lower as well.
Of course the Trump-Putin Summit on Ukraine will take place at 3 PM ET. The primary agenda is to get to a 2nd face to face meeting with Zelenskiy. A ceasefire in the process would also be a positive. The two leaders also could speak on arms control between the US and Russia. The negative is the meeting could result in no further meetings due to unreasonable demands, and increased sanctions imposed on Russia intended to inflict the most pain. We know that the US shot an arrow across the bow, by increasing tariffs on India for importing Russian oil. Other such sanctions that would cripple their lifeline (oil) would be likely (amongst others).
A lot around the markets shows US stocks mixed with the Dow higher, the S&P modestly higher (it closed at a record) and the Nasdaq little changed
- Dow up 277 points
- S&P up 10.46 points
- Nasdaq -4.44 points
IN the US debt market, the yields are little changed:
- 2-year yield 3.733%, -0.5 basis points
- 5-year yield 3.822%, +0.1 basis points
- 10-year yield 4.295%, +0.3 basis points
- 30-year yield 4.88%, +0.6 basis points
