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Daily Currency Watch
Overnight comment in brief:
28 June | Weak Biden performance lifts USD
- President Biden’s poor performance in the presidential debate saw UST yields and the DXY index push higher early in the Asian session. Asian equites pushed higher, as did US equity futures.
- Today’s data were a little firmer than expected. Tokyo CPI was in line with expectation at the headline level at 2.3%YoY, up from 2.2%YoY in May. However, both core measures were a touch firmer than expected at 2.1%YoY and 1.8%YoY, respectively. Within the report, service prices were firm. Industrial production rose 2.8%MoM in May. Housing starts were also slightly better than expected, while the unemployment rate was unchanged at 2.6%. A poll showed over 50% of SMEs saying the weak yen was a negative for them, as USD/JPY briefly pushed up above the 161.0 level. The Topix hit an intra-day 34-year high led by financial stocks amid expectations of higher rates.
- In Germany the YoY rate of decline for import prices eased to just -0.4%, hinting that goods price disinflation is coming to an end. Otherwise, it was a quiet start with French bonds opening flat to marginally tighter vs Bunds. EUR/USD sits around 1.0700. In the UK, Q1 GDP was revised a fraction higher, to 0.7%QoQ vs 0.6%QoQ previously. GBP/USD nudged higher after the release to sit around 1.2635 as Europe opens.
Read the full report - 28 June 2024
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