- US data will overshadow Trump/Putin meeting today.
- Traders reassessing Fed Rate cut outlook after robust PPI numbers.
- US dollar consolidating yesterday’s post-PPI gains.
USDCAD open 1.3794, overnight range 1.3791-1.3818, close 1.3818, WTI 63.58, Gold 3342.71
The Canadian dollar came under pressure yesterday following hotter than expected US PPI data that showed inflation was rising. Sticky inflation is a major stumbling block for FOMC officials and hampering their ability to trim interest rates.
Attention now turns to the University of Michigan’s consumer inflation expectations survey for further confirmation of rising U.S. price pressures.
China’s Ministry of Commerce has lodged a WTO complaint against Canada over its 25% tariff on Chinese steel and aluminum and 100% tariff on Chinese electric vehicles. Beijing accuses Ottawa of aligning too closely with Washington’s trade stance, while continuing to justify its own retaliatory measures on Canadian agricultural products, including canola, peas, and pork.
WTI oil is trading near the lower end of its overnight 63.23–64.13 range, with selling driven by weaker-than-expected Chinese retail sales and industrial production figures.
President Trump is meeting Russian President Vladimir Putin at Joint Base Elmendorf-Richardson in Anchorage, Alaska at 3:30 pm EDT. Trump is pushing for an agreement to end the war in Ukraine, warning of “severe consequences” if Moscow refuses.
A breakthrough appears unlikely, especially as Ukrainian President Volodymyr Zelenskyy has not been invited to participate.
Asian equity markets ended the week mostly higher, though Hong Kong’s Hang Seng slipped 0.98% after weaker Chinese economic data. Japan’s Topix rebounded 1.63% to recover Thursday’s losses, while Australia’s ASX 200 added 0.73%.
European indexes are positive as of 7:40 am EDT, led by France’s CAC-40 with a 0.60% gain, while Germany’s DAX and the UK FTSE 100 are flat. U.S. S&P 500 futures are up 0.10% and the US10-year Treasury yield i 4.29%.
EURUSD traded in a 1.1646–1.1692 range, rising modestly as the impact of Thursday’s stronger U.S. PPI eased. Traders are cautious ahead of U.S. releases and the Trump-Putin meeting, with no Eurozone data on the calendar.
GBPUSD is trading in a 1.3526-1.3565 band in quiet conditions ahead of U.S. data. Support from yesterday’s UK GDP persists, but failure to clear 1.3590 decisively could send prices back toward 1.3490–1.3500.
USDJPY bounced around in a 146.76–147.87 range after retreating from Thursday’s post-PPI peak. Japan’s Q2 GDP beat forecasts at 1.0% versus 0.4% expected, with the prior reading revised to 0.6%, adding weight to BoJ rate hike speculation. The jump in the U.S. 10-year yield from 4.20% to 4.29% is weighing on prices.
AUDUSD traded in a 0.6486–0.6515 range, edging higher on mild U.S. dollar softness while ignoring fresh weak Chinese data. The pair remains supported after better Australian employment results.
US data includes Retail Sales, the University of Michigan Consumer Sentiment Index with its inflation expectations measure, plus Industrial Production, Capacity Utilization, and Business Inventories.
Canadian economic releases today include June manufacturing and wholesale sales.
