Headlines:
- Equities stumble lower in European trading
- ECB's Nagel: Interest rates must rise further
- ECB's Visco: More rate hikes is not the only way to curb inflation
- ECB's Visco: I don't agree with idea of tightening too much over tightening too little
- Eurozone May PPI -1.9% vs -1.8% m/m expected
- Eurozone June final services PMI 52.0 vs 52.4 prelim
- UK June final services PMI 53.7 vs 53.7 prelim
- Japan sees biggest average wake hike since 1993
- Citi slashes euro area 2023 GDP growth forecast to 0.8% from 1.1% previously
- Morgan Stanley lowers oil price forecast, sees surplus for first-half of next year
Markets:
- EUR and USD lead, CAD lags on the day
- European equities lower; S&P 500 futures down 0.5%
- US 10-year yields flat at 3.863%
- Gold flat at $1,926.46
- WTI crude up 0.3% to $71.15
- Bitcoin down 1.1% to $30,416
After the slow start in Asia, things did pick up a little in Europe but not by much. Keep in mind that US traders are returning to the market today after an extended break from the 4th of July festivities since the weekend.
During the session, risk did tilt lower and the selling in equities is the notable development as stocks postured more defensively. S&P 500 futures were flattish early on but are now down 0.5% with European indices keeping most of their opening losses to be down around 0.5% to 0.7% currently.
The softer mood did drag commodity currencies lower with the aussie and loonie in particular being offered. USD/CAD is now up 0.4% to 1.3280 with AUD/USD down 0.4% to 0.6660 levels, with the latter facing a rejection from key resistance from its 100 and 200-day moving averages at around 0.6690-94 earlier.
The dollar is trading more mixed across the board with little changes against the euro (large expiries at 1.0900), yen, and pound.
We'll see how Wall Street takes to the early developments above and don't forget we also still have Fed minutes to come later.
