- The Chinese President says he is ready to work with Australia
- European Central Bank President Lagarde speaks on Monday
- Bitcoin is back above $63,500
- China Caixin Manufacturing PMI June 2024 51.8 (FX: 51.2, Previous: 51.7)
- Australian Special Inflation Survey, June 2024: +0.3% m/m (previously +0.3%)
- Roaring Kitty sued for securities fraud
- The People’s Bank of China sets the USD/CNY exchange rate today at 7.1265 (versus estimates of 7.2558)
- Japan final manufacturing PMI for June 50.0 (previous 50.4)
- Chinese national security authorities have greater powers to inspect smartphones as of today
- Japanese companies expect the consumer price index to rise to 2.4% a year from now
- Japan Q1 GDP (revised) -2.9% (from -1.8%)
- Bank of Japan Tankan: Large Manufacturing Index rises to +13 (expected 12, before 11)
- HSBC is concerned that progress in US inflation will stall in the coming months.
- Australian June Final Manufacturing PMI Falls Further to 47.2
- Update – I’ve seen at least two votes for 165 as the “new line in the sand” for USD/JPY.
- Team Macron still has a chance in the French election – here’s how
- US military bases in Europe on high alert – ‘credible intelligence indicates attack’
- Trading Ideas Topic – Monday, July 1, Useful charts, technical analysis, ideas
- Bank for International Settlements on the role that foreign exchange intervention plays in modern monetary policy
- The EUR/USD currency pair rose slightly
- North Korea launched a ballistic missile.
- Weekend Data – China’s official PMIs for June were mixed and generally disappointing
- The first round of the French elections.. “Macron’s centrist coalition suffers heavy losses”
- Monday Morning Open Levels – Indicative Forex Rates – July 01, 2024
- Weekly Market Outlook (July 1-5)
- Next Newsweek: French and UK Elections, US PMI and Nonfarm Payrolls Index, Eurozone CPI, FOMC Minutes
- Forexlive US Forex Market News Summary: Benign PCE Report Collides with Turbulent Politics
The EUR/USD pair opened for trading very early in Asia time (in New Zealand only) about 15-20 pips higher than its level late on Friday. This is not an epic bull gap, but that is what we get. The news of the impact on the euro was a result of the first round of elections in France, where the far-right National Rally is on track to win by about 34%.
- Leftist Alliance with 28.1, good performance for them
- President Emmanuel Macron’s centrist coalition came in second place with about 20.3%, a stunning loss.
Without getting too deep into French politics, the next and final round of voting will take place on July 7. If the results are similar, there are a number of possible scenarios, including a hung parliament, a coalition of parties to block the far right from coming into government, or a right-wing victory led by Le Pen. There are many permutations, feel free to discuss the politics in the comments.
However, why did the euro rise? Again, feel free to debate politics, but the likely outcome as investors see it is a more market-friendly government regardless of the far-right or center-right coalition. The victory of the far right is, at first glance, market-friendly. While the center-left alliance is expected to cause leftists to fall back on less market-friendly policies in order to govern.
I’m not sure I’m comfortable with either of these narratives, I think a period of instability is more likely but so far that’s not the prevailing theme.
The USD/JPY pair was little changed during the session. It rose back above the 161.00 level in early Tokyo trading, but that gain was compensated. But we are not talking about big moves.
Hong Kong markets were closed today to mark the Establishment Day of the Hong Kong Special Administrative Region. This was the day Communist China regained control of Hong Kong from the UK in 1997 when the lease expired.
Elsewhere in the region, South Korea recorded its largest monthly trade surplus in nearly 4 years.
China’s one-year interest rate swaps fell to their lowest since June 2020. Over the weekend, official PMIs were weak; manufacturing remained in contraction while services expanded at a slower rate. Today we got the Caixin/S&P private manufacturing PMI, which was better. More on that in the bullet points above.
Bitcoin price rises again above $63,500: