The USD is lower vs the three major currency pairs – the EURUSD, USDJPY and GBPUSD with the USDJPY the biggest mover with the USDJPY falling 0.39%. The USD is down -0.30% vs the GBP and -0.19% vs the EUR to kickstart the US session. Technically, both the EURUSD and the GBPUSD moved back above MA levels ubut the buyers (dollar sellers more in control). For the USDJPY, it fell and is down on the day, but did stall the fall near key technical support near the 100 and 200 hour MAs and bounced, keeping the buyers in play/control for now.
The week on the economic calendar is fairly light with US CPI on Wednesday, UK GDP on Thursday along with Initial jobless claims which are pushing higher lately, and Univ. of Michigan. Below is a look at the major releases and expectations:
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GBP Average Earnings Index 3m/y (Tue 2:00am): 5.3% forecast vs 5.5% prior
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GBP Claimant Count Change (Tue 2:00am): 9.5K forecast vs 5.2K prior
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USD Core CPI m/m (Wed 8:30am): 0.3% forecast vs 0.2% prior
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USD CPI m/m (Wed 8:30am): 0.2% forecast vs 0.2% prior
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USD CPI y/y (Wed 8:30am): 2.5% forecast vs 2.3% prior
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GBP GDP m/m (Thu 2:00am): -0.1% forecast vs 0.2% prior
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USD Core PPI m/m (Thu 8:30am): 0.3% forecast vs -0.4% prior
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USD PPI m/m (Thu 8:30am): 0.2% forecast vs -0.5% prior
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USD Unemployment Claims (Thu 8:30am): 241K forecast vs 247K prior
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CNY New Loans (Fri tentative): 890B forecast vs 280B prior
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USD Prelim UoM Consumer Sentiment (Fri 10:00am): 52.5 forecast vs 52.2 prior
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USD Prelim UoM Inflation Expectations (Fri 10:00am): Prior 6.6% (no forecast listed)
China and US relations on trader will be a key as well. NEC Director Hassett said the US and China trade reps will speak today sometime and he expects a handshake agreement on releasing more rare earths. Meanwhile, China overnight said that will work to cut the rare earth control’s impact on trade.
Overnight, China’s consumer inflation remained soft in May, with CPI falling 0.1% year-over-year, slightly better than the -0.2% expected and unchanged from April. On a monthly basis, CPI declined 0.2%, in line with forecasts. Meanwhile, producer prices (PPI) dropped 3.3% year-over-year, a deeper decline than the -3.2% expected, highlighting continued deflationary pressure in the industrial sector.
ECB policymaker Peter Kažimír stated that the central bank is likely nearing the end—or may already be at the end—of its easing cycle. While he acknowledged clear downside risks to economic growth, he cautioned against overlooking the potential for upside inflation pressures. Kažimír emphasized the need for the ECB to keep all policy options open, noting that data over the summer will be crucial in determining whether any fine-tuning of monetary policy is necessary.
Lookig at the US stocks, they are now higher. The futures are implying:
- Dow up 64 points
- S&P is up 9 points
- Nasdaq is up 13.5 points
The major indices closed higher last week led by the Nasdaq which rose 2.18%
