Forexlive Americas FX news wrap 12 Jul: PPI not as friendly as the CPI

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Read full post at forexlive.com

Yesterday,
the
US
CPI
was
a
friendly
number
as
it
came
in
lower
than
expectations.
Today,
the
PPI
data
was
the
exact
opposite.
The
headline
numbers
for
the
month
were
not
only
higher,
but
the
prior
months
were
revised
higher
as
well.

The
USD
and
yields
move
higher
initially
after
the
report,
but
the
memory
of
the
Chair
comments
this
week
where
he
talked
about
lower
inflation
and
how
it
isn’t
just
about
inflation
but
also
the
employment
picture,
along
with
the
CPI
data,
sent
yields
and
the
dollar
back
to
the
downside.

Later
at
10
AM
the
Michigan
consumer
confidence
stayed
near
low
levels
(and
below
expectations)
after
the
sharp,
surprising
drop
from
last
month.

All
of
which
helped
to
send
the
greenback
lower
vs
all
the
major
currencies
today.
At
the
end
of
the
day,
the
USD
was
unchanged
vs
the
CAD,
but
fell
by
-0.21%
vs
the
CHF
and
had
declines
of
-0.38%
to
-0.60%
vs
the
other
major
indices
(the
USD
fell
-0.60%
vs
both
the
GBP
and
the
JPY).

For
the
trading
week
the
USD
is
ending
mostly
lower
with
only
rising
modesly
vs
the
NZD.
The
greenbacks
changes
for
the
week
vs
the
majors
showed:

• EUR,
  -0.61%
• GBP,
  -1.35%
• JPY,
  -1.78%
• CHF,
  -0.08%
• CAD,
  -0.035%
• AUD,
  -0.53%
• NZD
  +0.43%

Looking
at
the
US
debt
market
today,
the
yields
moved
lower
with
the
2-year
the
biggest
decliner.
The
yield
spreads
continue
to
chip
away
at
the
negative
yield
curve
today:

• 2
  year
  yield
  4.457%,
  -4.9
  basis
  points.
  For
  the
  week,
  the
  yield
  fell
  -15.4
  basis
  points.
• 5
  year
  yield
  4.107%,
  -1.6
  basis
  points.
  For
  the
  week,
  the
  yield
  fell
  -12.3
  basis
  points.
• 10
  year
  yield
  4.186%,
  -0.6
  basis
  points.
  For
  the
  week,
  the
  yield
  fell
  -9.5
  basis
  points.
• 30
  year
  yield
  4.398%,
  -0.5
  basis
  points.
  For
  the
  week,
  the
  yield
  fell
  -8.1
  basis
  points

Looking
at
the
spreads:

• 2-10
  year
  spread,
  -27.1
  basis
  points
  which
  is
  the
  least
  negative
  close
  since
  January.
  For
  the
  week,
  the
  spread
  rose
  5.7
  basis
  points.
• 2-30
  year
  spread,
  -5.9
  basis
  points
  which
  is
  the
  least
  negative
  close
  also
  since
  the
  end
  of
  January.
  The
  spread
  rose
  by
  7
  basis
  points
  this
  week.

In
addition
to
lower
CPI,
the
yields
were
helped
by
favourable
3
and
10
year
note
auctions
(met
by
strong
domestic
demand).
The
30
year
bond
was
a
different
story,
but
2
out
of
3
outweighed
the
most
difficult
30
year
auction.

In
other
markets:

• Crude
  oil
  this
  week
  fell
  -1.14%
  to
  $82.21.
• Gold
  rose
  $19.54
  or
  0.82%
  to
  $2410.78
• Silver
  rose
  fell
  by
  -$0.47
  or
  -1.38%
  to
  $30.77
• Bitcoin
  rose
  by
  $1778
  to
  $57617

Next
week,

Monday:

• Empire
  manufacturing
• Fed
  Chair
  Powell
  at
  12
  PM
  ET

Tuesday

• Canada
  CPI
• US
  Retail
  Sales
• NZD
  CPI
  at
  6:45
  PME
  ET

Wednesday:

• UK
  CPI
• Austalia
  employment
  data
  9:30
  PM
  ET

Thursday:

• UK
  employment
• ECB
  rate
  decision
  (no
  change
  expected)
• US
  weekly
  jobless
  claims
• Philly
  Fed
  Manufacturing

Friday

• UK
  Retail
  Sales
• Canada
  Retail
  Sales.

The
major
earnings
releases
for
the
week
include:

Monday,
July
15

• Goldman
  Sachs,
  BlackRock,

Tuesday,
July
16

• Bank
  of
  America.United
  health
  group.Progressive.Morgan
  Stanley..Charles
  Schwab..PNC.Interactive
  Brokers.
  JB
  Hunt,

Wednesday,
July
17

• Johnson
  &
  Johnson,United,Alcoa,Discover,Kinder
  Morgan

Thursday,
July
18

• Taiwan
  Semi
  Conductor,Nokia,DR
  Horton,Netflix,Intuitive
  Surgical,PPG

Friday,
July
19

• American
  Express,Halliburton,,Comerica,Travelers

When
are
the
Magnificent
7
releasing
its
earnings
this
cycle?

• Alphabet,
  July
  23
• Microsoft
  July
  23
• Tesla
  July
  23
• Amazon,
  July
  25
• Meta
  Platforms,
  July
  31
• Apple,
  August
  1
• Nvidia,
  August
  15