Markets quiet ahead of Powell testimony
Financial markets are little changed overnight in light trading, as traders adjust positions in the wake of last week’s hawkish tilt by the Fed and ahead of today’s testimony by Fed Chair Powell. The dollar is broadly higher, but only slightly. Asian stocks are higher – the Japanese Nikkei is up over 3%, a rebound from yesterday’s sell-off – and European stocks are also higher, which helped US stocks open slightly higher this morning. US T-bond yields continue to rise, the 10yr is up to 1.50% and 30yr at 2.14%, after having dropped last Friday to 1.43% and 2.00%, respectively. Oil and gold prices are steady.
June 22, 2021
EUR/USD 1.1900 GBP/USD 1.3891 USD/CAD 1.2384 AUD/USD 0.7508 USD/JPY 110.7 USD/CNH 6.4774 USD/ILS 3.2602 USD/MXN 20.6698 USD/CHF 0.92 USD/INR 74.3663 USD/BRL 5.0385 USD/SGD 1.3463 USD/DKK 6.2495 USD/SEK 8.5448 USD/NOK 8.6026
The dollar is broadly higher, but on average by only 0.25% versus its G-10 peers. Trading is light as traders await a slew of US economic data over the next few days and today’s comments by several Fed officials, most importantly, Fed Chair Powell’s testimony before the House Select Subcommittee on pandemic aid and its asset purchase program.GBP
The UK pound edged lower in-line with broad dollar strength. Traders await today’s multiple Fed speakers and Thursday’s Bank of England interest rate decision. A slew of economic data for the UK will be reported over the next two days.EUR
With no EZ economic data reported today, trading in the euro was light and within a narrow trading range. The EUR/USD is lower overnight by 0.25%, in line with its G-10 peers. Currency option trading shows the strongest demand for EUR puts (downside protection) since June 2020.CAD
The Canadian dollar is down slightly versus the broadly stronger US dollar. Oil prices are steady, but (WTI) is not far from yesterday’s 2 ½ year high at $73.96 per barrel. Traders also await tomorrow’s Retail Sales for April in Canada with expectations for a 5.0% drop after March’s gain of 3.6%.ASIA/PACIFIC
Asian currencies as a group underperformed – the Japanese yen and Indian rupee dropping the most by 0.38%. As a group, Asian currencies have outperformed both LATAM and Eastern European over the last week. The Chinese yuan has been relatively quiet in June, and has not been driving directional moves in currencies versus the US dollar as it had in April/May.
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