- New York Fed President Williams is speaking on Wednesday
- European Central Bank President Lagarde speaks again on Wednesday
- South Korea's PM says the interest rate path to head downwards
- US President Biden will have a private lunch with Vice President Harris on Wednesday
- China Caixin June services PMI 51.2 (expected 53.4, prior 54.0)
- AUD/USD pops a little on better than expected data
- Australia data - Retail Sales May 2024: +0.6% m/m (exp +0.2%)
- Australia data - Building permits, May 2024: +5.5% m/m (expected +1.6%)
- PBOC sets USD/ CNY mid-point today at 7.1312 (vs. estimate at 7.2633)
- New Zealand data - ANZ Commodity Price Index, June 2024: +1.5% m/m (prior +1.1%)
- ICYMI - Taiwan says China seizes fishing boat near Chinese coast
- Japan June Services PMI 49.4 (prior 53.8)
- Note for the diary - China's plenum meeting in July will focus on the economy
- US politics - Meeting of top Democrats doesn't resolve question of Biden to stay or go
- Société Générale targeting 163.75 in USD/JPY
- Australia final June PMI: Services 51.2 (prior 52.5)
- Bloomberg reports on China making lethal attack drones for Russia
- UBS on gold into H2 of 2024 ... "most preferred."
- Deutsche Bank's four key risks for H2 of the year
- Forexlive Americas FX news wrap 2 Jul: Powell acknowledges disinflation, but no cut soon
- Massive crude oil inventory draw supports case for higher Brent
- Oil: Private survey of inventory shows a much larger headline crude oil draw than expected
- Chatter of a likely intervention in BRL is gathering pace
- NASDAQ and S&P indices close at record levels
- Trade ideas thread - Wednesday, 3 July, insightful charts, technical analysis, ideas
Let’s get the politics out of the way first. Speculation intensified that US Vice President Harris will replace US President Biden on the ticket for the November election, fuelled by the news that Biden and Harris will be sitting down to a private lunch together on Wednesday. Biden will meet with state Democratic Governors in the evening. EUR/USD ticked a few points lower at the time of this news crossing. Whether correlation is causation is the question. Had me scratching my head anyway.
USD/JPY dribbled higher around the same time, but hey, a weak yen is not news.
On the data front it was an active session.
Japan’s June Services PMI collapsed from 53.8 in May to 49.4 in June. Its first move into contraction in two years. This, of course, could go some way to explaining the weaker yen during the session.
From China we had the Caixin June Services PMI come in lower from May also. It remained in expansion though.
Retail sales data from Australia came in at a very solid beat indeed, at +0.6% m/.m vs. +0.2% expected. The Australian Bureau of Statistics were quick to dismiss the rise, citing consumers responding to discounting. Most analysts were the same. I am not buying these explanations. The employment market is still very strong, and we’ve just had a round of solid tax cuts (these hadn’t kicked in in May but folks knew they were coming), so maybe better retail sales are just … better retail sales. These will not prompt an RBA rate hike in and of themselves, but if the RBA is leaning to a hike to combat steady and perhaps rising inflation, the sales figures will not stand in the way.
The private oil inventory survey showed a huge draw, much higher than the consensus expectation. Official inventory figures will hit on Wednesday morning US time.
