Headlines:
- US retail sales the key focus today
- Dollar lightly softer awaiting US retail sales data
- European bond spreads widen amid Italy's political debacle
- Oil hangs on at key technical support
- ECB's Rehn: Likely to raise rates by 25 bps next week, then 50 bps in September
- Eurozone trade balance -€26.3 billion vs -€32.4 billion prior
Markets:
- CHF Leads, USD lags on the day
- European equities higher; S&P 500 futures up 0.2%
- US 10-year yields down 2.4 bps to 2.933%
- Gold down 0.3% to $1,704.73
- WTI crude up 1.6% to $97.32
- Bitcoin up 0.5% to $20,760
It was a quiet session for the most part, as markets breathed in some calm after the wild ride yesterday.
Fed's Waller put emphasis on the US retail sales report in gauging appetite for a 100 bps rate hike later this month and all eyes are on the report that is to be released at the bottom of the hour.
The dollar was steadier early on but is seeing some light weakness amid some positioning going into the data. EUR/USD was staying around 1.0020-30 before pushing to 1.0060. Meanwhile, USD/JPY is keeping a little softer on the day around 138.60-80 levels mostly but the upside push this week is still very much validated for now.
USD/CAD is offering one of the more interesting charts at the moment with the pair retreating back to 1.3060-70 levels now, threatening to invalidate the upside breakout yesterday.
Elsewhere, equities are looking calmer as investors will be hoping to try and salvage something after having seen late rebounds in the past two sessions fall short. But all the attention now is on the US retail sales data and that will set the tone before the weekend.
