It was a relatively quiet day in the forex to start the trading week.

Looking at some of the trading ranges for the major currency pairs:

  • EURUSD range was only 33 pips vs an average of 72 pips over the last month
  • GBPUUSD range was 61 pips vs an average of 96 pips
  • USDCHF range of 57 pips versus an average of 71 pips
  • USDCAD range was 44 pips versus an average of 71 pips
  • AUDUSD range was only 27 pips versus an average job 69 pips
  • NZDUSD range was only 46 pips versus an average of 61 pips
  • USDJPY range was 70 pips versus an average of 119 pips

Moreover, most of the ranges were set before US traders entered for the day

Ranking the strongest to the weakest of the major currencies to start the trading week, the NZD is the strongest and the AUD is the weakest. Overall, however, the major currencies are ending the day relatively close together. The USD is mostly lower but was unchanged on the day vs the GBP and the AUD.

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The strongest to the weakest of the major currencies

The only economic data released in the US today was The Dallas Federal Reserve's June manufacturing survey which showed a slight improvement in Texas-area manufacturing, with the main index at -23.2, compared to the previous month's -29.1. Output decreased to -4.2, a decline from the previous -1.3. New orders remained in negative territory, worsening slightly to -16.6 from the prior -16.1. The prices paid for raw materials showed an improvement at +1.4, a considerable drop from the prior +13.8, while the prices paid for finished goods fell to -1.9 from the previous +0.4. Employment levels showed a positive but decreased rate of +2.2, down from +9.6 in the previous report. If focused on prospects for lower inflation, it was good news. If focused on future weakness/recession potential it was not so great.

Stocks are leaning toward the recession view as they declined for the 2nd consecutive day in the major indices. The Nasdaq and S&P indices closed lower with the Nasdaq taking on most of the downside heat with a decline of -156.75 points or -1.16%. The S&P fell -0.45%. Both moved and closed below their 100-hour MAs (13468.73 for the Nasdaq and 4346.46 for the S&P). The Dow was marginally lower on the day.

European markets closed mixed today. The Euro Stoxx 50 saw a moderate gain of 0.21%, finishing at 4,280. The FTSE 100 and DAX 40 both experienced slight declines of -0.11%, closing at 7,453 and 15,813 respectively. Meanwhile, the CAC 40 rose by 0.29% to reach 7,184, and the FTSE MIB increased by 0.12%, closing at 27,242. The Spanish IBEX 35 also finished in the green, up 0.09% at 9,274.

The weekend news of the military mutiny was addressed by Russian Pres. Putin late in the NY session. He said that individuals involved in organizing a recent rebellion will face legal consequences, affirming that all necessary steps have been taken to mitigate any threats. He expressed gratitude to the commanders and soldiers of the Wagner Group for preventing unnecessary violence, and further declared that members of the Wagner troops now have two options: they can enlist in the Russian army or relocate to Belarus. What do you want to do, but the idea of getting off without punishment (or banishment does not seem an option?

In other markets as the clock ticks to the close:

  • Crude oil is up $0.39 or 0.55% at $69.54
  • Gold is up $3 or 0.16% at $1923.26
  • Bitcoin is trading steady at $30,210

In the US a debt market, yields are lower but off their lows for the day. The treasury sold USD 42 billion worth of re-opened 2-year notes with a stop-through of -0.8bps. The auction resulted in a high yield of 4.670%, a significant increase from the previous 4.3% and the six-auction average of 4.235%, but the demand was strong. The bid-to-cover ratio stood at 2.86x, higher than the six-auction average of 2.71x. Indirect foreign bidders led the charge by taking 68.5% well above its six-month average. The yield curve changes today are showing:

  • 2-year yield 4.744% -0.6 basis points
  • 5-year yield 3.969% -2.3 basis points
  • 10-year yield 3.723% -1.6 basis points
  • 30-year yield 3.817% -0.3 basis points

Feds Williams, although not scheduled to speak, said that restoring price stability was of paramount importance. I think that's a view shared by nearly all central bankers.