Headlines:
Weekend gap risk will likely keep markets rangeboundJapan says will not fixate on 9 July deadline in trade talks with USChina and EU had ‘in-depth’ conversation on remedying trade issuesAudi could set up new production plant in the US in response to Trump’s tariffs – reportBOJ governor Ueda: Japans economy recovering moderately albeit with some weaknessJapan plans to cut 2025 super-long JGB issuance by 3.2T yenUK May retail sales -2.7% vs -0.5% m/m expectedGermany May PPI -0.2% vs -0.3% m/m expectedFrance June business confidence 96 vs 96 prior
Markets:
EUR and GBP lead on the dayEuropean equities higher; S&P 500 futures down 0.1%US 10-year yields up 3.2 bps to 4.423%Gold down 0.5% to $3,353.09WTI crude up 0.2% to $73.99Bitcoin up 1.5% to $105,935
It was a relatively quiet and muted session as markets are pretty much waiting on developments in the Middle East. Amid the lack of any meaningful headlines, it’s a case of “can the weekend just come already?”.
The key thing to watch now is whether the US will get involved in the conflict between Iran and Israel. And that’s the only thing left that is keeping markets on edge before we get a breather over the next two days.
Major currencies had absolutely no appetite whatsoever with the dollar keeping little changed in general. EUR/USD is up 0.2% to 1.1516 but is caught between large option expiries between 1.1500 and 1.1525 on the day. Meanwhile, GBP/USD is up 0.2% to 1.3492 in recovering back the earlier drop to 1.3465 after a poor UK retail sales report.
Besides that, the dollar is flattish elsewhere across the board with USD/JPY looking to quietly hold a firm break above 145.00 with the pair up at 145.47 on the day.
In other markets, European stocks are looking to cut some losses from the week at least. Regional indices are up roughly 0.7% to 1.1% but that follows from three straight days of losses coming into today. The overall risk mood remains more tentative though with S&P 500 futures down just 0.1%.
All eyes are on the Middle East to see whether or not we will get any confirmation of US involvement before the weekend.
This article was written by Justin Low at www.forexlive.com.