- Canada July CPI 2.5% versus 2.5% expected
- Fed's Bowman: Some recent further progress on lowering inflation. Remain cautious on cuts
- US job seekers rise to highest since 2014 in NY Fed survey
- Philly Fed non-manufacturing employment index falls to the lowest since the pandemic
- New Zealand GDT price index +5.5%
- Canada July new housing price index +0.2% vs -0.2% prior
Markets:
- Gold up $10 to $2513
- US 10-year yields down 5.3 bps to 3.81%
- WTI crude oil down 55-cents to $74.04
- S&P 500 down 0.2%
- JPY leads, USD lags
It was another day of quiet news flow and big market moves. The dollar continues to deteriorate, leading to the highest levels in the euro this year.
The dollar selling was broad and consistent as Treasury yields fell again. The market is pricing in a drop in Fed funds and inflation in an environment with improving global growth and a solid US economy. There is also the growing likelihood of a deadlocked US Congress leading to less US fiscal stimulus and growth.
That thinking has contributed to a sagging US dollar and exit of crowded longs. The moves have even extended to USD/JPY selling despite an 8-day winning streak in stocks coming into the day.
One area that plays into the disinflation angle is oil, which was down for the fifth time in the past six days. Meanwhile, gold rallied to a fresh record high at $2531 before pulling back by $15.
