- FOMC minutes sound hawkish but little impact.
- US jobless claims data may reignite labour market concerns.
- US dollar opens little changed
USDCAD open 1.3914, overnight range 1.3899-1.3918, close 1.3919, WTI 63.40, Gold 3330.36
The Canadian dollar sank after traders reacted to the stronger than expected US S&P PMI report sent the odds for the Fed to cut rates tumbling, from a peak around 92% last week to 69.8% today.
Canada Retail Sales are on tap and forecast to rebound 1.5% m/m in June after May’s 1.1% drop, with ex-autos expected to rise 1.1% following the previous -0.2% print. Much of the rebound is seen as payback after May’s tariff-related caution led to weaker spending. However, the results will be overshadowed by news from the Kansas City Fed’s Jackson Hole Symposium.
Fed Chair Powell set to deliver the marquee address. ECB President Christine Lagarde and BoE Governor Andrew Bailey are also scheduled to speak, keeping traders on edge for policy hints from across the Atlantic.
WTI oil prices traded in a 63.31-63.82 range, staying firm on the back of shrinking US crude inventories and the ongoing conflict in Ukraine.
Canada Retail Sales are forecast to rebound 1.5% m/m in June after May’s 1.1% drop, with ex-autos expected to rise 1.1% following the previous -0.2% print. Much of the rebound is seen as payback after May’s tariff-related caution led to weaker spending.
Asian equities traded with a positive tilt. Japan’s Topix added 0.58% and Hong Kong’s Hang Seng rose 0.93%, though Australia’s ASX 200 slipped 0.57%. European bourses are modestly firmer, with the CAC-40 up 0.28% and the DAX ahead 0.12%, while the FTSE 100 is flat. As of 7:25 am, S&P 500 futures are up 0.22%, the 10-year Treasury yield is steady at 4.334%, gold is at $3329.17, and the Dollar Index is 98.71.
EURUSD drifted in a 1.1583-1.1617 range, consolidating losses after German Q2 GDP was revised lower to -0.3% q/q from -0.1%. Softer odds of a Fed rate cut and the absence of progress in Russia/Ukraine ceasefire negotiations added to the bearish tone.
GBPUSD traded in a 1.3390-1.3424 range, bouncing off the bottom as traders waited on Powell’s speech. UK GfK consumer confidence improved slightly to -17 from -19, while the upcoming long weekend in the UK kept activity subdued.
USDJPY was steady in a 148.25-148.75 range, consolidating gains from the previous session. Demand for US dollars after the upbeat US PMI data and the lift in Treasury yields overshadowed Japanese inflation figures that came in close to expectations.
AUDUSD traded in a 0.6415-0.6432 range and remained pinned near weekly lows as broad US dollar strength dominated price action following the US data.
