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This might be the end of the line for Joe Biden’s bid to remain as President.

“We’re close to the end,” a person close to Biden told NBC News.

A person who spoke with a senior campaign official said a sense of a new reality has fallen over the campaign.

“They’re finally realizing: It’s a when, not if,” the person said.

Sky News Arabia also tweeted a report that he was dropping out but they later deleted it.

Reports this week have highlighted that top Democrats have told him he can’t win and that the public perception of his diminishing capacity is cemented.

Adding to the report, the Atlantic highlights that Peter Welch remains the only Democratic senator to call for Biden to step aside. He’s growing confident the pressure campaign is working. I asked him, what needs to happen now? “I think it’s happening, actually,” Welch replied.

Welch supports an open nomination after he drops out, not a coronation of Kamala Harris.

Meanwhile, Biden is also fighting a battle on the health front. In a letter, Biden’s doctor says the President is experiencing “mild upper respiratory symptoms” from COVID-19. The doctor says he does not have a fever and continues to work.

Earlier today
a report in the Washington Post said that former President Barack Obama told allies Biden’s pathway to victory was greatly diminished and that he needs to seriously consider if his campaign remains viable.

This article was written by Adam Button at www.forexlive.com.

For what it is worth, the Washington Post is putting that former Pres. Obama tell allies that Biden needs to seriously consider his viability.

The article adds that Biden’s path to victory has significantly shrunk.

The sentiment is not unusual of late. Biden has even opened the door, saying in a new BET interview that he would consider dropping out of the 2024 presidential race if a doctor diagnosed him with a “medical condition.”.

• Yesterday Rep. Adam Schiff (D-Calif.) became the most high-profile elected Democrat to call for Biden’s withdrawal from the race. Schiff is close to former Speaker of the House Pelosi (who still supports the President).

Also, a new poll out Wednesday, showed that nearly 2/3 of Democratic voters want Biden to drop out of the race.

The Republican Convention is ongoing but winding down. The Democratic National Convention will take place from August 19 to August 22. That is still a ways away.

Will Biden step down?

Do you think he should step down?

Yes and yes is my vote/guess…

This article was written by Greg Michalowski at www.forexlive.com.

Closing changes:

• German DAX -0.4%.
• France CAC +0.4%
• UK FTSE 100 +0.3%
• Spain’s IBEX +0.5%
• Italy’s FTSE MIB +0.5%

French stocks are trying to recover from the election but aren’t finding it easy.

This article was written by Adam Button at www.forexlive.com.

Chipmakers and broader tech bounced early today but that move has since reversed and the Nasdaq is under pressure. The index is now at a session low, down 1%.

The selling picked up on a report that Biden could drop out this weekend, though I think that’s somewhat correlation than causation. Certainly, all the political uncertainty in the US is hurting and adding to volatility.

The growing risk is that we see a retracement to the 38.2% level of the rally since April (or below). That would be a further 2.5% drop from here.

Chipmakers have been the generals of the rally since April but they’re flagging. Nvidia rallied 2% early but is now down 0.8% and at the lowes since June 4. AMD is down 3.6% while QCOM and AVGO are down around 2%. ASML was crushed yesterday and is down another 2.2% today and is back to early-May levels.

This article was written by Adam Button at www.forexlive.com.

Axios reports:

Several top Democrats privately tell us the rising pressure of party congressional leaders and close friends will persuade President Biden to decide to drop out of the presidential race, as soon as this weekend.

There have been fresh calls for Biden to drop out today along with reports that Jeffries, Pelosi and Schumer all told Biden that he should leave the race.

PredictIt had been moving earlier today to suggest that Biden was no longer the favourite to be the nominee.

Biden is currently self-isolating with covid but “privately he’s resigned to mounting pressure, bad polls, and untenable scrutiny making it impossible to continue his campaign,” according to the report.

The report says the pressure has been rising to ‘intolerable’ levels, especially over the past few days. A poll yesterday showed that nearly two-thirds of democratic voters want Biden to withdraw.

The report doesn’t leave much to the imagination as it’s the firmest sign yet that he will exit.

This article was written by Adam Button at www.forexlive.com.

• Prior was -0.5%

This is a composite index of data that’s already released. It’s never a market mover but it can be a handy reminder of the recent trend in economic data.

This article was written by Adam Button at www.forexlive.com.

Ursula von der Leyen has been re-elected as the President of the European Commission for a new five-year term but it wasn’t easy. Her re-election was supported by 401 deputies, with 284 voting against and 15 abstaining. It was a secret ballot with no one standing against her.

In June, Italy’s Meloni abstained on the vote but today Fratelli d’Italia signals they voted against her.

The narrow win came from a coalition of the centre-right, the socialists and liberals. She pledged to stick to climate targets and launch common defense projects, including common air defense. In a nod to the centre-right she also pledged less bureaucracy.

von der Leyen is a mother of seven and was a medical doctor before going into politics.

This article was written by Adam Button at www.forexlive.com.

• Prior week 222k revised to 223K.
• Initial jobless claims 243K vs. 230K estimate. Highest since August of last year.
• 4-week moving average of initial jobless claims 234.75K vs 233.75K last week
• prior week continuing claims 1.852M revised to 1.847M.
• Continuing claims 1.867M vs 1.855M estimate. This is the 6th week above 1.800M. Highest since November 2021.
• 4-week moving average of continuing claims 1.851M vs 1.839M last week.

This week is the survey week for the BLS employment report to be released at the start of the next month.

The data this week should be less influenced by faulty seasonals as a result of the July 4 holiday. As a result, it should be more reflective of the trends in the employment (all things being equal). THe move to the upside in both the initial and continuing claims is suggestive of a weaker employment picture.

This article was written by Greg Michalowski at www.forexlive.com.

• Prior was +1.3
• Six month index +38.7 vs +13.8 prior
• Capex +7.4 vs +12.1 prior
• Employment: +15.2 vs -2.5 prior
• New orders: +20.7 vs -2.2 prior
• Prices paid: +19.8 vs +22.5 prior
• Prices received: +24.2 vs +13.7 prior
• Shipments: +27.8 vs -7.2 prior
• Unfilled orders: +9.1 vs +8.9 prior
• Delivery times: +8.5 vs -9.4 prior
• Inventories: -9.4 vs -6.4 prior
• Avg employee workweek: -1.6 vs +4.8 prior

The July Philly Fed manufacturing report paints a much brighter picture than recent months, with activity expanding across most metrics. The rebound in new orders and shipments is particularly encouraging. While inflation pressures persist, the surge in the future activity index suggests manufacturers are becoming more optimistic about growth.

That said, this release is overshadowed by the initial jobless claims report released at the same time that shows a numb higher.

This article was written by Adam Button at www.forexlive.com.

Headlines:

• Not much to get excited about the ECB meeting decision later
• Major currencies slow things down after the action yesterday
• BOJ data does not suggest evidence of intervention on 17 July
• Japan chief Cabinet secretary says no comment on FX moves
• UK May ILO unemployment rate 4.4% vs 4.4% expected
• Switzerland June trade balance CHF 6.18 billion vs CHF 5.81 billion prior
• China’s Communist Party central committee adopts resolution on further deepening reforms

Markets:

• AUD leads, GBP lags on the day
• European equities higher; S&P 500 futures up 0.1%
• US 10-year yields up 4.3 bps to 4.188%
• Gold up 0.2% to $2,463.58
• WTI crude down 0.1% to $82.74
• Bitcoin up 0.2% to $64,687

It was a much quieter session as markets calmed down following all the action yesterday.

In FX, the Japanese yen nudged lower as BOJ data suggested no evidence of intervention yesterday. USD/JPY had already risen from a low of 155.36 in Asia to around 156.00-30 before pushing to around 156.45 now.

Meanwhile, the pound is also a touch softer as GBP/USD continues to stay under the 1.3000 mark. That despite the UK labour market report showing indications that wage pressures remain on the high side for the BOE.

Besides that, there is very little action elsewhere in the FX space with other major currencies not doing much.

That owes much to the calmer mood in equities today as well. US futures are steadier following the selloff in tech shares yesterday. But it is still early in the day, and we could see the overall mood switch up again – one way or another – later in US trading.

For now, it’s on to the ECB policy decision next. But that shouldn’t be one to get traders off their seats, given that the central bank is to keep rates unchanged and defer thing to the September meeting instead.

This article was written by Justin Low at www.forexlive.com.

It is very much a placeholder meeting as the ECB has made it clear that they will not cut rates today. Instead, policymakers have been teeing up the idea of the next move coming in September. So, this will be a slight pause following the rate cut in June.

As such, there will be very little to scrutinise in the decision later. The narrative now is that the ECB is still reaffirming that policy is restrictive enough after the first rate cut. And that they are waiting to gain more confidence in the months ahead on the disinflation process.

In fact, the latter was already part and parcel of the equation in June as evident by the meeting accounts here. The governing council ended up supporting Lane’s proposal to cut key rates by 25 bps but there were quite a number of reservations put forward with regards to the inflation outlook.

So, those same reservations i.e. stronger services inflation and wage pressures, will be used as reasons for them to stay on the sidelines today.

I wouldn’t expect much from Lagarde either as it would not be prudent to pre-commit to a move in September. That would be a big misstep on her part if it happens. As poor as she has been in some of the pressers before, I don’t see her pulling off such a miscommunication this time.

It will be pretty much ensuring that September remains live with a strong probability of cutting again if things continue to trend accordingly. But at the same time, reaffirming that they have the flexibility to react to any surprises in the data.

The best way in telling that they did the job right today will be to observe minimal reaction in the euro itself.

This article was written by Justin Low at www.forexlive.com.