Global assets were pricing in their individual headlines until the US session when high-profile calendar events influenced broader market themes.
What are the headlines that moved the markets during the recent trading sessions?
We have a breakdown for you:
headlines:
- Minutes from the Reserve Bank of Australia’s June meeting highlighted rising inflation risks and showed members’ concerns that the “narrow path” to getting inflation back to target within a reasonable timeframe had “become narrower”.
- Eurozone CPI for June slowed from 2.6% y/y to 2.5% y/y as expected; core CPI maintained its reading of 2.9% y/y (vs. 2.8% expected)
- Eurozone unemployment rate remained at 6.4% as expected in May
- S&P Global Manufacturing PMI in Canada held steady at 49.3 in June; ‘Production costs rose only modestly’; Employment levels fell for first time since January
- U.S. job openings rose from a downwardly revised 7.92 million to 8.14 million in May.
- European Central Bank President Christine Lagarde said they do not need to see services inflation at 2% and that a strong labor market means that “We can take the time to gather new information.“
- Fed Chair Powell expressed satisfaction with progress on inflation but wants to see more evidence before cutting interest rates this year.
Price movement in the broad market:
Dollar Index, Gold, S&P 500, Oil, 10-Year US Treasury Yield, Bitcoin Chart by TradingView
Major assets mostly remained within their ranges during the Asian session, but things got more interesting once the European and US sessions got underway.
Crude oil prices rose during the European session due to escalating tensions between Israel and the Iranian-backed Hezbollah. However, the rise did not last long. The strength of the US dollar, along with easing concerns about the impact of Hurricane Beryl on US gas supplies, led to oil prices falling again.
The yield on the 10-year US Treasury note fell after hitting a four-week high yesterday. There was a brief spike when the positive US jobs report was released, but the yield eventually settled at around 4.34%.
Meanwhile, Bitcoin (BTC/USD) continued its slide from the previous US session, facing fresh bearish pressure that pushed it comfortably below the $62,000 level.
Forex Market Behavior: US Dollar vs Major Currencies
Comparison between the US dollar and major currencies Chart by TradingView
The US dollar traded in ranges during the Asian session but started to weaken against its major counterparts in early European trading.
There were no major catalysts for the move, but profit-taking from yesterday’s Trump-related rallies and caution ahead of U.S. data this week may be a factor in the dollar’s weakness.
Fed Chairman Powell’s not-so-hawkish speech helped provide fresh downward pressure on the dollar during the US session. While the Fed chief indicated that he would need more data before agreeing to a rate cut, he also played down speculation of future rate hikes.
The release of the better-than-expected US JOLTS job openings report briefly lifted the US dollar, but the downward pressure quickly regained momentum and helped drag the dollar to fresh intraday lows by the end of the day.
Potential catalysts coming up on the economic calendar:
- French government budget at 6:45 am GMT
- Spain Services PMI at 7:15 am GMT
- Italy Services PMI at 7:45 am GMT
- France Final Services PMI at 7:50am GMT
- Germany Final Services PMI at 7:55 AM GMT
- Final Eurozone Services PMI at 8:00 am GMT
- UK Services PMI Final at 8:30am GMT
- Eurozone PPI report at 9:00 am GMT
- Challenger job cuts at 11:30am GMT
- US ADP report at 12:15 PM GMT
- US Initial Jobless Claims at 12:30 PM GMT
- Canada Trade Balance Data at 12:30 PM GMT
- US ISM Services PMI at 2:00 PM GMT
- US Factory Orders at 2:00 PM GMT
- European Central Bank President Lagarde will speak at 2:15 p.m. GMT.
- US crude oil inventories according to the US Energy Information Administration at 2:30 pm GMT
- US Federal Open Market Committee Meeting Minutes at 6:00 PM GMT
It’s time to warm up your day trading muscles as we await a slew of high-profile reports! The Eurozone’s services PMIs are likely to be in focus during the European session.
Next up, the spotlight will be on U.S. employment reports, with Uncle Sam releasing data two days before the U.S. Fourth of July holiday. After that, the Federal Reserve will release its latest policy meeting minutes, which could shed more light on members’ latest monetary policy biases.
Traders will be watching what European PMIs could mean for services inflation in the region, while data out of the US could weigh on overall demand for the US dollar and “risky” assets. Make sure you’re there when the reports are released so you don’t miss out on volatility!
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