- US July retail sales +0.7% versus +0.4% expected
- Canada July CPI 3.3% YoY versus 3.0% expected
- US Empire Fed manufacturing index for August -19.0 vs -1.00 estimate
- US NAHB August housing market index 50 vs 56 expected
- Fed's Kashkari: I feel good about progress on inflation but it's still too high
- Atlanta Fed GDPNow sees 3Q growth at 5.0% up from 4.1% last.
- Russia discusses return to capital controls to halt ruble drop
- New Zealand GDT price index -7.4%
- US July import prices +0.4% vs +0.2% expected
- US business inventories for June 0.0% versus 0.1% expected
- Canada June manufacturing sales -1.7% vs -2.0% expected
Markets:
- Gold down $5 to $1902
- US 10-year yields up 3.3 bps to 4.21%
- WTI crude oil down $1.51 to $81.00
- GBP leads, NZD lags
There were some larger moves in equities today and fixed income was volatile but the FX market wraps up the day largely unchanged with the big majors finishing up the day withing a dozen pips of opening levels, led by some small GBP buying. The laggards were the commodity currencies as they were hit by negative China sentiment and falling raw materials prices.
AUD/USD climbed early in Asia on the PBOC cut but gave it back on the soft data and touched a new low for the year at 0.6452. It's on track to finish at the lows as well in what's now been more than a month of steadily selling. The daily chart shows support right here so it's now or never for the Aussie bulls.
NZD/USD has already broken the May low and will be in focus in the upcoming session as the RBNZ sets rates. The consensus call is for no change from 5.50%.
US 10-year yields touched a 2023 high of 4.27% immediately after the retail sales data but the bond buyers jumped on the higher payouts in part due to a rapid deterioration in the Empire and (later) NABH numbers. The dollar rallied with the pop in yields but gave it all back as the fixed income market turned. But even with the rout in stocks, yields still finished the day higher in a somewhat-worrisome sign.
Gold isn't struggling as yields rise and has fallen to $1902 from $1940 in the past week. It briefly touched below $1900 today for the first time since June and the low of the year at $1892 is easily within striking distance. Watch for stops if that level gives out.
Elsewhere, it looks as though the rally in USD/JPY will continue for a seventh day but there are some signs of exhaustion as buyers failed to get much traction at 145.80 before falling back. We get the Reuters Tankan manufacturing index today but yesterday's GDP data painted a picture of an economy in flux and that could bring the BOJ back into the picture.
