Headlines:
- Japan top FX diplomat Kanda declines to comment on suspected intervention yesterday
- BOJ data suggests Japan may have spent over ¥3 trillion on intervention yesterday
- What has changed after the US CPI report?
- Japan to slash economic growth forecast later this month - report
- More Japanese households anticipate prices to be higher in the next year - BOJ survey
- China June M2 money supply +6.2% vs +6.8% y/y expected
- France June final CPI +2.2% vs +2.1% y/y prelim
- Spain June final CPI +3.4% vs +3.4% y/y prelim
Markets:
- GBP leads, JPY lags on the day
- European equities higher; S&P 500 futures flat
- US 10-year yields up 2.5 bps to 4.218%
- Gold down 0.6% to $2,400.77
- WTI crude up 0.9% to $83.35
- Bitcoin down 0.5% to $57,250
It was a much calmer session following the big swings after the US CPI report yesterday and in part in Asia trading today as well.
The Japanese yen stole the spotlight after Tokyo decided to intervene yesterday, in what was a rather unorthodox move on their part. USD/JPY continued to swing in Asia trading but ultimately settled down when we got to European morning trade. The pair hugged levels around 159.00-30 for the most part, even as BOJ data suggested that Japan did step into the market.
Besides that, the dollar was a touch softer across the board. EUR/USD is up 0.2% to 1.0890 and GBP/USD up 0.4% to 1.2960 in a light extension to the post-CPI moves.
As for the broader market mood, it was more tentative to some degree. S&P 500 futures remain flattish as we get into earnings season. JP Morgan topped Q2 revenue estimates while Wells Fargo reported a miss amid a decline in net interest income. In Europe, stocks remain modestly optimistic in keeping the rebound over the last two days.
Elsewhere, bond yields are up slightly after the overnight fall with 10-year yields in the US still holding at the June low of 4.19%. As for commodities, gold and silver are both pulling back wit the former dragged back towards $2,400 while the latter is down over 2% to $30.69 on the day.
