US Treasury Secretary Bessent: We are moving toward a vote today on big beautiful bill
SNB’s Zanetti: Negative interest rates are an optionMore from ECB’s Kazaks: Any further rate cut would be smallEurozone June preliminary CPI +2.0% vs +2.0% y/y expectedECB’s Vujcic: Face possibility of new inflation shocksUK June final manufacturing PMI 47.7 vs 47.7 prelimBoJ’s Masu: Don’t have any strong disagreement that underlying inflation still short of 2%Eurozone June final manufacturing PMI 49.5 vs 49.4 prelimGermany June employment change 11k vs 15k expectedGermany June final manufacturing PMI 49.0 vs 49.0 prelimFrance June final manufacturing PMI 48.1 vs 47.8 prelimECB’s Kazaks: Any further rate adjustments will be nothing bigItaly June manufacturing PMI 48.4 vs 49.5 expectedSwitzerland June manufacturing PMI 49.6 vs 44.0 expectedSpain June manufacturing PMI 51.4 vs 50.5 expectedECB’s Escriva: Symmetric 2% goal should remain ECB’s primary guideBoE’s Bailey: Have to watch for inflation persistenceECB’s Wunsch: If we would have to move, it would be downECB’s de Guindos: Possibility of undershooting 2% target is quite limitedECB’s Lane: ECB must stand ready to counter any deviation in CPISwitzerland May retail sales 0.0% vs +1.3% y/y priorECB’s Nagel: Policy is now in neutral zoneUK June Nationwide house prices -0.8% vs +0.2% m/m expectedTrump hits back at Musk as the feud continuesFX option expiries for 1 July 10am New York cutUS officials reportedly seeking leaner trade agreements ahead of 9 July deadline
It’s been a session packed with central bank speakers as we have the annual ECB forum in Sintra. We haven’t got anything new in terms of forward guidance, but one notable comment was made by ECB’s de Guindos when he talked about the euro exchange rate. He said that 1.20 is something they could overlook, but anything more than that would be ‘complicated’.
It looks like their pain threshold and might trigger a rate cut even if inflation doesn’t surprise much on either side. Speaking of inflation, the Eurozone CPI came out in line with expectations across the board, so we haven’t got much reaction in the markets. Moreover, the Euro Area consumer inflation expectations fell for both the 1-year and 3-years ahead. So far, so good for the ECB.
In the markets, the most notable mover was once again the US dollar as it continues to lose ground across the board. The moves against the Swiss Franc in particular have been quite aggressive. We had SNB’s Zanetti today mentioning again negative rates as being an option. Unfortunately, they’ve been talking about interventions and negative rates for a long time but never walked the talk. Meanwhile, Swiss CPI continues to fall and the currency remains incredibly strong.
In the American session, we have the US ISM Manufacturing PMI and the US Job Openings data coming up. The focus will likely be on the ISM report, especially on the prices component. Also note that we have Fed Chair Powell, ECB President Lagarde, BoE Governor Bailey and BoJ
Governor Ueda scheduled to speak at 13:30 GMT/09:30 ET. But given that
they are all data dependent and they all spoke very recently, it’s
unlikely that they will say anything new.
This article was written by Giuseppe Dellamotta at www.forexlive.com.