Good morning
Yen is stronger once again, UDSJPY traded down to 154.35, the lowest level since mid-May, now 154.65. As always when Yen pushes higher, we look for signs of intervention. On the face of it this looks more like just a USDJPY sell-off, exaggerated by a push through technical support levels, however I would not be surprised if Japan had, shall we say, gently helped it on its way. GBPJPY has slipped below 200.00, now 199.40 having been as low as 198.95 earlier this morning.
GBPUSD has been pretty stable so far this week, now 1.2890, a few pips lower than this time yesterday but nothing really significant. EURUSD is 1.0835, also a touch lower, while GBPEUR is 1.1895. Some interest in commodity currencies, both AUD and NZD are continuing their move lower, with GBPAUD now 1.9530 and GBPNZD 2.1725, both just off the highs from earlier this morning which saw GBPAUD at its highest levels since September last year and GBPNZD breaking its March 2020 highs to hit levels not seen since May 2016. One month ago GBPNZD was around the 2.06 area, quite a move that has, to some extent, gone relatively unnoticed.
A big day for another commodity currency today. Bank of Canada will be announcing their latest rates decision this afternoon. Everything is pointing towards another 25bps cut to 4.5%, we have had softer inflation numbers and some weak housing and retail trade data recently which is likely to influence the decision, although there are still a couple of economists who think they will pause this time around. USDCAD now 1.3790, GBPCAD 1.7785.
Although the bookies still have Trump marginally ahead in the US Presidential elections, some polls are now showing Harris with a slight lead, having broken a host of fundraising records. Biden is set to speak tonight, his first such speech following his decision to withdraw from the Presidential contest. We may find out what finally encouraged him to withdraw.
In France, Macron has rejected an attempt by the left-wing alliance to name a prime minister, confirming the government will remain in place through the Olympics. Meanwhile some 75,000 police and troops will be taking to the streets of Paris in a security operation of unprecedented size.
Other than the BoC announcement, we will have EU, UK and US PMIs through the day, all potential market movers, particularly should the US readings come out softer than expected which will encourage the doves to look for a Fed rate cut at its meeting this time next week. There are many road closures in the capital, ahead of the opening ceremony. I can only hope that the Olympics takes place with no major security issues. An attack on a soldier in Kent yesterday evening reminds us that there are always some people out with a desire to harm others.
Aside from the Olympics, I’m starting to look at the football transfer market gossip a bit closer as the start of the season draws nearer. Most of it is nonsense, perhaps with a degree of truth in it, but we see many teams linked with many players around this time and they rarely come to fruition. Plenty of time before the Premier league kicks off on 16th August.
Have a great day
- 09.00 EU manufacturing, services PMIs
- 09.00 South Africa CPI
- 09.30 UK S&P manufacturing, services PMIs
- 13.00 ECBs Lane speaks
- 14.45 BoC rate announcement
- 14.45 US S&P manufacturing, services PMIs
- 15.00 US new home sales
- 15.30 BoC press conference
- 21.05 Feds Bowman speaks
- 01.00 Biden speaks
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