Canada May CPI +3.2% y/y vs +3.0% expectedEurozone flash June consumer confidnce -17.7 vs -17.5 expectedQatar says the LNG plant explosion was an accident, not aggressionNetflix shares are beginning to price in disruptionSpaceX shares are down 10% as Elon Musk taps the bond marketWe have made a lot of good progress on Iran talks, says Vance
Markets:
GBP leads, EUR lagsWTI crude oil down $1.65 to $74.20Nasdaq down 1.4%Gold up $24 to $4185US 10-year yields up 6 bps to 4.51%
Eyes were on USD/JPY today after the weekly close on Friday was the highest since 1986. But it had not broken the intraday high from 2024 of 161.99. It challenged that level today and got to 161.92 before a swift drop to 161.20. The pair then rebounded to 161.77 before a second flush down to 161.08 in a move that looks like intervention. Despite that, the bulls have taken USD/JPY back to 161.58 as dawn breaks in Asia.
The dollar was generally strong across all fronts as Treasury yields rose 5-6 bps across the curve. US 2-year yields hit fresh 14-monht highs at 4.23% despite another 2% decline in oil prices. The bond market continues to evaluate the hawkish shift at the Fed and we’re now priced for 42 bps in hikes by year end.
Despite that, the stock market opened strongly and it was only a slump in some large tech names — led by Google — that reversed the market. The S&P 500 ended the day down 0.4% and the Russell 2000 was up 0.8%. That’s a concerning divergence with bonds and one to watch carefully.
Elsewhere in FX, the market seemed to like Keir Starmer’s resignation as the pound was the only major currency to outperforme the dollar. Eyes will remain on the yen in the hours ahead as we look for official confirmation on intervention.
This article was written by Adam Button at investinglive.com.