Fed Preview: July Marks the End of the Hiking Cycle

We expect the Fed to hike interest rates for the final time by 25bp in the next week's meeting, and then go on hold.

Crypto Dragged Back to the Support Line on Risk-Off

Bitcoin failed to develop any local upward momentum and continues to test the lower boundary of its last trading range. Following the sell-off in risk assets and the rise in the dollar, the first cryptocurrency has returned to below $30,000. A failure below opens the door to a deeper correction to $28.9K, where the 61.8% Fibonacci retracement and 50-day MA are concentrated.

Canada: Auto Sales Drive Retail Sales Growth in May, But Momentum is Fading

May brought a sizeable deceleration in retail spending growth. The only sector that points to a decisive gain is auto sales, where both nominal and unit sales were up. The rest of the categories are a mixed bag that points to consumers prioritizing spending on groceries at an expense of discretionary purchases. In real terms, second quarter real consumer spending is now tracking just slightly below 1.0% quarter-on-quarter (annualized).

Has the Bank of Canada Reached its Interest Rate Summit?

The Bank of Canada (BoC) raised its policy rate 25 bps to 5.00% at last week's announcement, and while BoC Governor Macklem suggested the end of the tightening cycle was close, there were nonetheless several hawlish elements in the announcement. In particular, the Bank of Canada expects excess demand within the Canadian economy to persist for longer than previously anticipated, while also raising its CPI inflation forecasts.

Technical Picture for EUR/USD Improved

The technical picture for EUR/USD improved after yesterday’s break of 1.1095. 1.1274 is 62% retracement from the early 2021 top to the 0.9536 cycle low. This morning UK production/monthly GDP data printed mixed to slightly better than expected EUR/GBP in a first reaction shows no clear directional reaction.

UK Economy Continues to Show Resilience, Chinese Trade Data Disappoints

The UK economy posted only a small contraction in May which was much better than forecast as the country continues to show strong resilience in the face of significant pressures.

Swiss Franc Strengthens to 2020 Pandemic Levels

The USD/CHF rate fell below 0.87 for the first time since the spring of 2020, when financial market participants saw the Swiss franc as a “safe haven” amid panic associated with the spread of the coronavirus pandemic. Perhaps the demand for the Swiss franc in 2023 is facilitated by geopolitical factors: ongoing hostilities in Ukraine, […]

Dollar Index Falls to a Minimum of the Year

Yesterday, important data on inflation in the United States was published: the CPI index was 3% in annual terms, this is the lowest value since the beginning of 2021. Thus, inflation is slowing down for the 12th month in a row, approaching the target of 2%.

Sterling Climbs as UK GDP Beats Estimate

The British pound continues to rally against the US dollar. GBP/USD has risen to 1.3068, up 0.62%. The pound hit a 15-month high earlier today and is up a sizzling 1.77% this week.

Sunset Market Commentary

The post US CPI-moves petered out after the mixed figures. US yields lose 11 bps (2-yr) to 3 bps (30-yr) at the time of writing. The US 10-yr yield tested last week’s broken resistance-turned-support at 3.8%. German yields fall by 7 bps (30-yr) to 10 bps (5-yr).