Global assets were pricing in their individual headlines until the U.S. session when top-tier calendar events influenced broader market themes.
Which headlines moved the markets in the last trading sessions?
We have the breakdown for ya:
Headlines:
- RBA’s June meeting minutes emphasized upside inflation risks and showed members’ concerns that the “narrow path” of returning inflation to target in a reasonable timeframe was “becoming narrower”
- Euro Area flash CPI estimate for June slowed down from 2.6% y/y to 2.5% y/y as expected; Core CPI maintained its 2.9% y/y reading (vs. 2.8% expected)
- Euro Area’s unemployment rate remained at 6.4% as expected in May
- S&P Global Canada manufacturing PMI steadied at 49.3 in June; “Output charges increased only modestly;” Staffing levels declined for the first time since January
- U.S. JOLTS job openings jumped from a downwardly revised 7.92M to 8.14M in May
- ECB Pres. Lagarde said they don’t need to see services inflation at 2% and that a strong labor market meant that “we can take time to gather new information“
- Fed Chairman Powell expressed satisfaction with the progress on inflation but wants to see more evidence before cutting interest rates this year
Broad Market Price Action:
Dollar Index, Gold, S&P 500, Oil, U.S. 10-yr Yield, Bitcoin Overlay Chart by TradingView
The major assets mostly stayed within their ranges during the Asian session, but things got a lot more interesting once the European and U.S. sessions kicked in.
Tensions are heating up between Israel and Iran-backed Hezbollah, which drove crude oil prices up during the European session. However, this spike didn’t last long. The U.S. dollar’s strength, along with easing worries about Hurricane Beryl’s impact on U.S. gas supplies, pulled oil prices back down.
U.S. 10-year Treasury yields took a dip after reaching a four-week high yesterday. There was a brief spike when a positive U.S. JOLTS job openings report came out, but yields eventually settled at around 4.34%.
Meanwhile, Bitcoin (BTC/USD) continued its slide from the previous U.S. session, facing new bearish pressure that pushed it comfortably below the $62,000 mark.
FX Market Behavior: U.S. Dollar vs. Majors
Overlay of USD vs. Major Currencies Chart by TradingView
The U.S. dollar traded in ranges during the Asian session but started weakening against its major counterparts at the start of European session trading.
There were no major catalysts for the move but profit-taking from yesterday’s Trump-related rallies and caution ahead of this week’s U.S. data releases may have factored in the Greenback’s weakness.
A not-so-hawkish speech by Fed Chairman Powell helped provide fresh bearish pressure for the dollar during the U.S. session. While the Fed head honcho telegraphed that he’ll need more data before agreeing to a rate cut, he also downplayed speculations of a future rate hike.
The release of a better-than-expected U.S. JOLTS job openings report briefly took the U.S. dollar higher but the bearish pressure soon regained momentum and helped drag the dollar to new intraday lows by the end of the day.
Upcoming Potential Catalysts on the Economic Calendar:
- France’s government budget balance at 6:45 am GMT
- Spain’s services PMI at 7:15 am GMT
- Italy’s services PMI at 7:45 am GMT
- France’s final services PMI at 7:50 am GMT
- Germany’s final services PMI at 7:55 am GMT
- Euro Area final services PMI at 8:00 am GMT
- U.K.’s final services PMI at 8:30 am GMT
- Euro Area PPI report at 9:00 am GMT
- U.S. Challenger job cuts at 11:30 am GMT
- U.S. ADP report at 12:15 pm GMT
- U.S. initial jobless claims at 12:30 pm GMT
- Canada’s trade balance data at 12:30 pm GMT
- U.S. ISM services PMI at 2:00 pm GMT
- U.S. factory orders at 2:00 pm GMT
- ECB President Lagarde to give a speech at 2:15 pm GMT
- U.S. EIA crude oil inventories at 2:30 pm GMT
- U.S. FOMC meeting minutes at 6:00 pm GMT
It’s time to warm up your day trading muscles because we have a TON of top-tier reports heading our way! Services PMIs in the European region will likely take center stage during the European session.
Then, the spotlight will be on employment-related reports in the U.S. as Uncle Sam drops two days’ worth of data ahead of the U.S. July 4th holiday. After that, the Fed will publish its latest meeting minutes which may shed more deets on the members’ most recent monetary policy biases.
Traders will be on the lookout for what the European PMIs could mean for services inflation in the region while data prints from the U.S. could shape the overall demand for USD and “risky” assets. Make sure you’re around during the reports’ releases so you don’t miss out on volatility opportunities!
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