Friday saw a quick leap higher in the Euro following the announcement of a deal on EU immigration policy, generating some “risk-on” sentiment through the FX markets, although stocks ended pretty much flat on the session. End of month/quarter flows were also apparent in the price action, as was some technical trade following the failed breakout attempts vs the Euro at 1.1500 and the 95.53 double-top in the USD index (DXY).
The other big mover on Friday was oil, with WTI putting on another 1%, as signs of a slowdown in US output and continued supply outages prompted traders to maintain their bullish outlook. Gold squeezed a little higher but endured a tough month, having fallen from a high of 1310.
In terms of data, the inflation figures released from the US on Friday were solid. The headline PCE accelerated to 2.3% yy in May, up from 2.0% yy and beat expectation of 2.0% yy, while the Core PCE also jumped, to 2.0% yy, up from 1.8% yy and beat expectation of 1.8% yy. Personal income rose 0.4% in May, matching expectation. On the other hand, personal spending rose 0.2%, below expectation of 0.4%. The Jun Chicago PMI came in at 64.1, above expectations of 60.0, and the previous months 62.7.
Overall, the data underpinned the Fed’s projection of two more rate hikes this year, in September and December.
The coming week is going to be a busy one for data, with something featuring o most days, but with most of the attention to be on Thursday’s FOMC Minutes which will be delayed by 24 hours due to the US July 4 holiday. Monday kicks off with the Japan Q2 Tankan and the global Manufacturing PMIs, while Tuesday will focus on the RBA Meeting, although no change to policy is expected. Wednesday will see the Australian Retail Sales and the global Services/Composite PMIs although liquidity will become thin due to the US holiday. Thursday will be rather thin until the US arrive, when the ADP Jobs data is due, ahead of the FOMC Minutes, and which comes ahead of Friday’s Jobs/NFP/Average Hourly Earnings data. Have a good week.
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