Are the Summer Doldrums here?! It sure looks like it as the major currency markets held a ranging pattern up until Friday, where the Dollar snuck in a quick rally to take the the top spot among the majors going into the weekend.
Notable News & Economic Updates:
- Higher interest rates would be good for the country, Treasury Secretary Yellen says
- China’s imports grow at fastest pace in decade as materials prices surge
- El Salvador looks to become the world’s first country to adopt bitcoin as legal tender
- US oil hits $70 on Monday for the first time in nearly three years
- U.S. crude stocks down, fuel inventories rise -EIA
- Top international health officials worry about new Covid variants that may be able to evade vaccines
- US lifts sanctions on 3 former Iranian officials and two companies
- Despite uncertainties, OPEC sticks to forecast of oil demand surge in second half
- U.S. consumer prices jump 5% in May, fastest pace since the summer of 2008
- Biden and G-7 leaders will endorse a global minimum corporate tax of at least 15%
- Biden to donate 500 million Pfizer doses, urge others to join in
- UK PM Johnson plans to delay lockdown lifting until July 19
- S&P 500 ekes out another record close, posts third straight winning week
- The FDA reportedly forces J&J to scrap about 60 million doses of its Covid vaccine
- IMF sees legal, economic issues with El Salvador’s bitcoin move
Summer Doldrums Are Here
Dollar, Gold, S&P 500, 10-yr Treasury Yield, Bitcoin, OilDollar, Gold, S&P 500, 10-yr Treasury Yield, Bitcoin, Oil
Despite a steady stream of news and economic updates, there were no major price action moves to see as equities, currencies, and gold stayed relatively rangebound this week.
It’s likely that not only are we seeing the seasonal ‘Summer doldrums’ in play with traders likely away from their desks and no major headlines hitting the wires lately, but those who were around to trade may have stayed on the sidelines in anticipation of the latest inflation numbers from the U.S.
The CPI number came in hot on Thursday, coming in at 5.0% y/y, which was mostly expected and likely why we didn’t see a reaction from the markets. Apparently, they weren’t hot enough to change the perception that the Federal Reserve will not make moves or hints to tighten monetary policy at next week’s meeting.
Oil made a choppy move to the upside as OPEC’s expectations of higher demand in 2021 outweighed the rise in fuel inventories and news of the U.S. dropping sanctions on 3 former Iranian officials and two companies.
Crypto market volatility continued to subside, but was a mover this week off of headlines that included the recovery of ransom bitcoin from the Colonial pipeline hack and the move by El Salvador to make bitcoin legal tender.
And again, currencies traded sideways for most of the week, with the pop higher in the Greenback on Friday as the only move of note. This rally doesn’t appear to have a direct catalyst, and with expectations of the Fed holding on it’s “transitory inflation” stance next week, it was odd move. Whatever the case may be for USD gains, it was enough to take the U.S. dollar into the top spot among the major currencies at the Friday close.
USD Pairs
- In April, consumer credit increased at a seasonally adjusted annual rate of 5.3%
- The Fed is in early stages of a campaign to prepare markets for tapering its asset purchases
- U.S. consumers sour on housing market’s buying conditions
- Job openings reached a series high of 9.3M on the last business day of April – U.S. Bureau of Labor Statistics
- U.S. International Trade in Goods and Services for April 2021: -$68.9B vs. -$75.0B in March 2021
- U.S. wholesale inventories rise solidly; supply constraints loom
- U.S. budget deficit for fiscal 2021 so far tops $2 trillion
- US weekly jobless claims slide to new pandemic-era low of 376,000
- Bipartisan Senate group reaches infrastructure deal without tax hikes — but leaders still need to sign off
- U.S. consumer sentiment rebounds in early June – survey
- Fed may opt for faster phase-out of housing-backed bond purchases
GBP Pairs
- Bank of England Releases Discussion Paper on Stablecoins, CBDC
- U.K. House prices jump 9.5% as buyers seek larger homes, Halifax says
- UK BRC retail sales increase in May
- Bank of England’s Haldane says job uncertainties are “pretty acute”
- U.K. construction output sank 2% in April vs. projected 1.0% gain
- U.K. economy expanded 2.3% in April vs. 2.4% forecast
- U.K. industrial production fell 1.3% in April vs. projected 1.2% increase
- Central bank digital currency would be a historic innovation, says BoE’s Bailey
EUR Pairs
- Euro zone investor morale rises to highest level since Feb 2018
- Germany factory orders drop after mounting supply shortages
- GDP down by 0.3% and employment down by 0.3% in the euro area In the EU, GDP down by 0.1% and employment down by 0.2%
- German investor morale falls but strong recovery still expected
- German Trade Balance in April 2021: 15.5 billion euros
- ECB avoids ‘taper talk’ and says inflation will remain lower than its target
- French nonfarm payrolls increased by 0.3% following a 0.3% rise from the previous quarter
- French industrial production fell by 0.1% in April versus a forecasted 0.5% increase.
- ECB’s Lagarde Says Price Pressures `Remain Subdued’
- German Wholesale prices in May 2021: +9.7% y/y
- The number of employed Italian declines by 243K (-1.1%) compared to the previous quarter
- More sustainable euro zone inflation coming: ECB’s Knot
- ECB officials warn of inflation risk despite extending stimulus
CHF Pairs
- The Swiss unemployment rate fell from 3.3% in April 2021 to 3.1% in May
- Swiss Consumer prices increased by 0.3% in May
CAD Pairs
- Canada posts C$594 million trade surplus in April as imports slump
- Bank of Canada keeps key rate at 0.25%, maintains QE policy
- Bank of Canada says inflation could remain hot if pressures persist
- Canadian industries operated at 81.7% of their production capacity in the first quarter, up from 79.7% in the fourth quarter of 2020.
NZD Pairs
- BusinessNZ Performance of Manufacturing Index ticks higher to 58.6 in May vs. 58.3 in Apr.
- The ANZ Business Outlook Index in New Zealand was at -0.4 in June 2021
- BusinessNZ Performance of Manufacturing Index ticks higher to 58.6 in May vs. 58.3 in Apr.
AUD Pairs
- Australia’s ANZ job advertisements up 7.9% in May
- Inflation Expectations unchanged at 3.7% in May, but rising faster for homeowners than renters since 2020 record low
- China-Australia relations: trading relationship still strong with growing divide between ‘rhetoric and reality’
- Australia’s Westpac consumer sentiment down 5.2% in June
JPY Pairs
- Japanese leading indicators up from 102.5% to 103.0%
- Japan’s GDP shrank less than first reported amid emergency
- Japan service sector sentiment dips in May
- Japan FinMin says G7 clinches ‘historic’ deal on minimum global tax
- Japan’s April real wages post largest monthly gain since 2010
- Japan’s producer prices rise by 0.7% in May
- Japan’s Large Business Manufacturing Index: -1.4% q/q in Q2 2021
