• The US dollar is sporting a firmer profile against most of the major currencies today, but ranges are tight and so far, the quarter-end of quiet.
• The spread of the Delta mutation is spurring talk of a fifth wave in Japan and 80% of Australia’s population is in lockdown, the most since the pandemic first struck.
• China’s composite June PMI slipped to 52.9, its lowest level since February.
• EMU preliminary June CPI was in line with expectations, slipping to 1.9% from 2.0%. The base effect and re-opening impact could see prices accelerate toward 3% by the end of Q3.
• The focus in the US turns to the labor market today, with the ADP private-sector estimate, and tomorrow’s weekly jobless claims ahead of Friday’s national job report.
• Canada is expected to report that its economy contracted in April for the first time since last April. The economy is expected to expand by 2% in Q2 before accelerating in Q3.
The dollar is finishing the quarter on firm footing, gaining against most of the major currencies today. The euro is straddling the $1.1900 area, having begun the month above $1.22. Sterling has tested the $1.38 area. It had traded at a three-year high near $1.4250 at the start of the month. Similarly, the US dollar set a seven-year high near CAD1.20 on June 1 and is now trying to get a foothold above CAD1.24. Emerging market currencies are mixed today, but the JP Morgan Emerging Market Currency Index is off for the fourth session and is poised to finish the month lower for the first time since March.
The US 10-year yield is soft, near 1.45%, off about 14 bp this month. European yields are around two basis points lower today and mostly down less than Treasury yields this month.
After another record close for the S&P 500, most markets in the Asia Pacific advanced, but Japan and Hong Kong. On the month, the MSCI Asia Pacific Index is nearly flat. Europe’s Dow Jones Stoxx 600 is trading with a heavier bias but is still likely to finish its fifth consecutive month with gains. US futures indices are a little lower. Coming into today, the S&P 500 is up around 2% this month, and the NASDAQ is up about 5.7%.
Gold is holding above yesterday’s $1750 low, but it continues to struggle to sustain upticks. It is off almost 8% in June after beginning the month above $1900. WTI set a 3-year high on Monday slightly below $74.50 and has been consolidating over the past couple of sessions. It is little changed, around $73. API estimated that the US drew down its oil stocks by another 8 mln barrels. The CRB Index is up 2.7% this month and is at six-year highs.
Bannockburn Global Forex