Headlines:
- UK June CPI +9.4% vs +9.3% y/y expected
- Germany June PPI +0.6% vs +1.3% m/m expected
- German government reportedly to pass on some energy costs to consumers in Uniper bailout
- Eurozone May current account balance -€4.49 billion vs -€5.76 billion prior
- European bond relief as Draghi plays down concerns of quitting
- US MBA mortgage applications w.e. 15 July -6.3% vs -1.7% prior
- Shanghai residents required to take weekly COVID-19 test until end of August
Markets:
- NZD leads, EUR lags on the day
- European equities lower; S&P 500 futures down 0.2%
- US 10-year yields down 4.6 bps to 2.973%
- Gold down 0.2% to $1,706.53
- WTI crude down 1.7% to $102.48
- Bitcoin up 1.8% to $23,703
The session started with a light dash of optimism and some dollar sluggishness but some pushing and pulling saw things turn around as equities turn gains into losses and the greenback found a footing.
European stocks opened with gains as US futures held higher, looking to build on yesterday's rally. But the positive momentum was dashed as US futures turned negative and European indices also followed suit - currently seeing red.
The dollar steadied itself amid the shift in sentiment with EUR/USD falling from a high of 1.0273 early on to 1.0175 before sticking closer to 1.0200 currently. Meanwhile, GBP/USD also erased a slight advance from 1.2030 to 1.1970 on the session.
USD/JPY was largely steady, holding around 138.10-20 levels mostly whereas commodity currencies also saw early gains chipped away. AUD/USD advanced to 0.6930 early on before falling back now to near 0.6900, close to the lows for the day. NZD/USD also pared gains a little but the drop wasn't quite as drastic from 0.6270 to 0.6250 and is still up 0.3% at the moment.
A lot of the market focus is now shifting towards key central bank decisions with the BOJ and ECB set to come tomorrow before we get to the Fed next Wednesday. The nerves are starting to show and that could be a reason for the more mixed sentiment in the run up.