The AUD is the strongest and the JPY is the weakest as the North American session begins

<p>The AUD is the strongest and the JPY is the weakest as the North American session begins. The USD is just a whisker away from the USDJPY in being the weakest of the majors as well. Call it a dead heat for the weakest. The USD was the runaway weakest of the major currencies yesterday after the softer than expected CPI data which took the YoY down to 3.0% and the Core YoY to 4.8%. The trend is lower, but there is still work to do. The shelter component rose 0.4% accounting for 70% of the gains according to the BLS. </p><p>Today traders once again will be watching fresh inflation data from the U.S. The PPI Final Demand on a year-over-year (YoY) basis, it's expected to show a rise of 0.4%, which is a decrease from the 1.1% growth reported in May. That would be the lowest level since September 2020. On a month-over-month (MoM) basis, the PPI Final Demand is projected to increase by 0.2%, representing an upturn from May's -0.3%.</p><p>When it comes to the PPI figures excluding food and energy, the YoY growth for June is projected at 2.6% (would be the lowest since February 2021), slightly below the 2.8% increase seen in May. However, the MoM growth rate is expected to hold steady at 0.2%. </p><p>Lastly, the PPI excluding food, energy, and trade services is anticipated to stay at 2.8% on a YoY basis and 0.0% on a MoM basis. These PPI data are important as they provide insights into potential future CPI inflationary trends within the manufacturing sector.</p><p>Also scheduled for release will be the US Initial claims for the current week. The forecast is for 250,000 claims, slightly higher than the 248,000 from last week. The average number of claims over the past four weeks, came in at 253.25K last week. Lastly, the Continuing Jobless Claims report for the week ending July 1 is anticipated to hold steady near 1.72 million claims. The continuing claims data has been trending more to the downside which is indicative of those getting laid off, finding jobs shortly thereafter. </p><p>Stock futures trading this morning are pointed towards continued gains, with the Dow, S&amp;P 500, and Nasdaq 100 all higher. This comes after the broader indices closed at their highest levels in over a year following the lower CPI, as traders speculate that the Federal Reserve might soon relax its aggressive policy tightening.</p><p>Meanwhile in China overnight, trade data for June missed expectations, causing concerns for the world's second-largest economy. Chinese exports fell by 12.4% annually, surpassing forecasts for a 9.5% decline. Imports also decreased by 6.8%, a more significant contraction than the estimated 4.0% fall. These disappointing trade figures have raised doubts about China's ability to rely on external sources for economic growth, amidst ongoing inflation in developed countries and geopolitical tensions that could impact trade activity for the remainder of 2023.</p><p>In other China news, they announced new regulations for generative artificial intelligence (AI), with the Cyberspace Administration of China requiring companies to perform security assessments and algorithm filing procedures before product launches, effective August 15. This move aligns with Beijing's efforts to gain more control over AI. </p><p>Despite the overnight China news, oil prices are marginally higher. The price remains between the 100-day MA below at $73.69, and below the 200-day MA at $77.32. </p><p>In other markets:</p><ul><li>Crude oil is trading up $0.16 or 0.21% at $75.91</li><li>Spot gold is trading up $3.34 or 0.17% at $1959.63</li><li>Silver is trading up $0.18 or 0.76% at $24.27</li><li>Bitcoin is trading at $30,562 after ending near $30,300 at 5 PM yesterday</li></ul><p>In the premarket for US stocks, the major indices are trading higher. Yesterday, the indices closed higher for the 3rd consecutive day, led by the NASDAQ</p><ul><li>Dow Industrial Average is trading up 85 points. It rose 86.01 points yesterday</li><li>S&amp;P index is trading up 18.3 points. It rose 32.90 points yesterday</li><li>NASDAQ index is trading up 116 points. It rose 158.26 points yesterday</li></ul><p>In the European equity markets, the major indices are trading higher after strong gains yesterday. </p><ul><li>German DAX, +0.62%</li><li>France's CAC, +0.80%</li><li>UK's FTSE 100, +0.31%</li><li>Spain's Ibex, +0.45%</li><li>Italy's FTSE MIB, +0.99% (delayed). </li></ul><p>In the Asian Pacific market today, markets closed higher:</p><ul><li><p>Japan’s Nikkei 225, +1.49%</p></li><li><p>China’s Shanghai Composite, +1.26%</p></li><li><p>Hong Kong’s Hang Seng, +2.60%</p></li><li><p>Australia’s S&amp;P/ASX 200, +1.56%</p></li></ul><p>In the US debt market, yields are lower in early US trading</p><ul><li>2-year yield 4.843%, -5.3 basis points</li><li>5-year yield 4.187%, -5.0 basis points</li><li>10-year yield 3.942%, -4.0 basis points</li><li>30-year yield 4.006%, -1.5 basis points basis points</li></ul><p>In the European debt market, benchmark 10-year yields are down sharply</p><p>.</p>

This article was written by Greg Michalowski at www.forexlive.com.