Political factors remained significant with Boris Johnson’s insistence that the October 31st Brexit deadline would not be extended.
Fed Chair Powell indicated that the central bank does not want to over-react to single data points and the rhetoric dampened expectations of an aggressive 0.50% rate cut in July.
After posting fresh 3-month lows earlier in the session, the dollar was able to secure a significant recovery with EUR/USD failing to hold 1.1400.
Equities registered disappointment over Fed rhetoric and lost ground with caution over US-China trade relations also a significant element.
Gold dipped significantly from fresh 5-year highs as the US dollar recovery amplified pressure for a correction.
US oil prices moved sharply higher to a 3-week peak after a substantial API weekly inventory draw. Gains in oil prices underpinned the Canadian dollar.
Bitcoin pushed sharply higher once again with 17-month highs above $12,000.
After a positive start, Sterling was unable to make further headway with no sustained break of significant resistance levels. Political factors remained significant with Boris Johnson’s insistence that the October 31st Brexit deadline would not be extended, undermining sentiment to some extent as underlying fears over a ‘no-deal’ outcome increased.
The CBI distributive sales index recorded further deterioration in June with a reading of -42 from -24 the previous month and well below consensus forecasts. Although adverse weather conditions are likely to have had at least a limited impact, retailers were also pessimistic over the outlook for July.
Sterling was again unable to sustain initial gains and dipped lower in US trading with GBP/EUR fell to the 1.150 area while there was a GBP/USD retreat to below 1.2700 given a firmer dollar. Markets will be monitoring Bank of England rhetoric on Wednesday with the UK currency initially unable to make headway in early Europe.
|07:00||German GfK Consumer Confidence (JUL)||10.4||10.1|
|09:00||CHF ZEW Expectations(JUN)||-||-14.3|
|10:15||BoE Gov Carney Speaks||-||-|
|10:15||GBP BoE Inflation Report(Q/Q)||-||-|
|12:00||USD MBA Mortgage Applications||-||-3.40%|
|13:30||USD Durable Goods Orders (M/M)(MAY)||-||-2.10%|
|13:30||USD Durable Goods Orders Ex Transportation(MAY)||-||-1.00%|
|13:30||USD Goods Trade Balance(MAY)||-||-70.92B|
|13:30||USD Wholesale Inventories(MAY 01)||0.60%||0.80%|
|15:30||USD Crude Oil Inventories||-2.891M||-3.106M|
|16:30||FOMC Member Mary Daly Speech||-||-|