The USD is flat, oil prices edge higher, while equity markets and US yields are mixed on the assassination attempt news. The US steadied after initially gaining against its G10 peers. At the same time, the Mexican peso fell over 1% against the USD as investors increased wagers for a Donald Trump win in the US presidential election after Saturday's assassination attempt. Global equity markets are mixed, while US futures strengthened and European equities fell as the luxury sector retreated. The US 30-year yield rose above the 2-year for the first time since January on bets that Former President Trump would pursue a more expansive fiscal policy if he returns to the White House. Elsewhere, metal prices rose on soft China data, boosting expectations for the government to announce stimulus measures. Bitcoin rallied nearly 5%, oil prices edged higher, and gold prices slipped. Today's focus is Fed Chair Powell's speech at the Economic Club of Washington and the BoC Business Outlook Survey. Tuesday, ECB Lending Survey, CAD Inflation Report, US Retail Sales. Wednesday, UK CPI, US Housing Permit, Industrial Production. Thursday, UK Employment data, ECB Monetary Policy Statement, US Initial Jobless Claims, Philadelphia Fed Manufacturing Survey. Friday, German PPI, UK Retail Sales, CAD Retail Sales, Fed's Williams & Bostic speeches.
In other news, Biden urges Americans to 'lower the temperature' after Trump's shooting. France is 'dangerously exposed' as the budget deficit grows, warns the national auditor. China's economic growth comes in worse than expected, adding pressure on Xi. Burberry replaces the chief executive and warns about profits. Airbuz upgrades 20-year demand forecast led by wide-body jets. Alphabet is in talks to buy Wiz in a $23 billion cyber deal. Apple's India sales surge is 33%, which is a record as the China shift persists. Canada's Freeland hints at broader trade action against China. The LCBO scraps plan to open dozens of stores amid ongoing strike.
In currency markets, the USD Index gives back early gains as markets settle following the assassination attempt on former President Trump. CNY weakens 0.2% on weak Q2 economic data, while Asian currencies slip 0.1% on average against the USD. Trading currencies are mixed, with ZAR and MXN tumbling 1.2%, SEK falling 0.55%, NZD weakening 0.4%, AUD, NOK, and CHF and JPY flat against the USD.
In commodity markets. Oil prices edge 0.1% higher, Natural Gas & Wheat prices tumbled by 2.5%, Gold prices slipped by 0.2%, Silver prices eased by 0.7%, Copper prices weakened by 0.9%, and Soybean prices dropped by 1.4%.
CAD slips in early trading as commodity prices remain under pressure, while the USD gives up early gains as markets continue to digest the impact of the assassination attempt on former President Trump. Domestically, the focus will be on today's Business Outlook Survey released by the BoC and Tuesday's crucial inflation report, which will help guide the July 24th Bank of Canada's interest rate decision. Today, markets will be focused on the Fed Chair's comment to help provide intraday direction to the loonie today.
EURCAD continues to extend its gains to a fresh 5-week high on increasing expectations that the BoC will lower interest rates on July 24th.
EUR holds above 1.0900 ahead of Fed Chair Powell's speech. The euro holds above 1.0900 as the USD's early gains stall, and the focus shifts back to the Fed Chair's speech today. Domestically, investors will be bracing for the eurozone inflation report on Wednesday and Thursday's ECB Monetary Policy Statement & Rate on the Deposit facility, which is expected to set the stage for an interest rate cut in September. If we see a less hawkish tone from Fed Chair Powell, we could see the Euro come under fresh selling pressure.
GBPEUR comes under early selling pressure ahead of a week of key UK data releases.
GBP remains capped at 1.3000 despite a softening USD. The pound gives back some of the previous week's gains as investors await PM Starmer's 35 bills, which he will present in the King's speech next week. Domestically, the focus will be on this week's flurry of key economic data releases, including Wednesday's UK inflation report, PPI, unemployment report, and Retail Sales, which will help provide some guidance heading into the BoE August interest rate decision. Fed Chair Powell's comments will help drive the intraday direction for the pound.
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