Forexlive Americas FX news wrap 14 Jul. USD rises today but down for the week

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Dow up for the 5th consecutive day</a></li><li><a href="https://www.forexlive.com/centralbank/bank-of-canadas-macklem-our-forecast-has-inflation-moving-around-3-most-of-next-year-20230714/">Bank of Canada's Macklem: Our forecast has inflation moving around 3% most of next year</a></li><li><a href="https://www.forexlive.com/technical-analysis/wti-crude-oil-futures-settle-at-7542-20230714/">WTI crude oil futures settle at $75.42</a></li><li><a href="https://www.forexlive.com/news/what-earnings-will-be-released-next-week-20230714/">What earnings will be released next week?</a></li><li><a href="https://www.forexlive.com/news/baker-hughes-oil-rig-count-3-to-537-20230714/">Baker Hughes oil rig count -3 to 537</a></li><li><a href="https://www.forexlive.com/news/european-major-indices-move-modestly-lower-today-but-have-solid-gains-for-the-week-20230714/">European major indices move modestly lower today but have solid gains for the week</a></li><li><a href="https://www.forexlive.com/news/university-of-michigan-preliminary-sentiment-for-july-726-versus-655-estimate-20230714/">University of Michigan preliminary sentiment for July 72.6 versus 65.5 estimate</a></li><li><a href="https://www.forexlive.com/centralbank/feds-goolsbee-there-is-a-path-to-curb-inflation-without-recession-20230714/">Feds Goolsbee: There is a path to curb inflation without recession</a></li><li><a href="https://www.forexlive.com/news/jp-morgans-dimon-the-headwinds-in-the-economy-are-substantial-20230714/">J.P. Morgan's Dimon: The headwinds in the economy are substantial</a></li><li><a href="https://www.forexlive.com/news/us-import-prices-for-june-02-versus-01-expected-20230714/">US import prices for June -0.2% versus -0.1% expected. YoY import prices -6.1%</a></li><li><a href="https://www.forexlive.com/news/canadian-manufacturing-sales-for-may-2023-12-versus-08-expected-20230714/">Canadian manufacturing sales for May 2023 1.2% versus 0.8% expected</a></li><li><a href="https://www.forexlive.com/news/wsj-timiraos-july-is-all-but-decided-hawks-already-pushing-for-september-20230714/">WSJ Timiraos: July is all but decided. Hawks already pushing for September</a></li><li><a href="https://www.forexlive.com/technical-analysis/the-eur-is-the-strongest-and-the-jpy-is-the-weakest-as-the-north-american-session-begins-20230714/">The EUR is the strongest and the JPY is the weakest as the North American session begins.</a></li><li><a href="https://www.forexlive.com/news/forexlive-european-fx-news-wrap-dollar-rout-hits-pause-for-now-20230714/">ForexLive European FX news wrap: Dollar rout hits pause for now</a></li></ul><p>The USD rebounded today as it reacted to the preliminary Univ of Michigan 1- year inflation expectations moving up and overall better data from the monthly consumer survey. Yields also moved higher sharply higher. </p><p>The inflation reading showed a modest increase from 3.3% to 3.4%. However, a market that has reacted favorably to better CPI and PPI data this week, having even the smallest of gains, took a little wind out of the "inflation is moving lower" sails. The actual sentiment indices were also sharply higher with the:</p><ul><li>Consumer sentiment rising to 72.6 from 64.4 last month, </li><li>Current conditions rising to 77.5 from 69.0 last month, and</li><li>Expectations rising to 69.4 from 61.5 last month. </li></ul><p>Looking at the strongest to the weakest, the EUR inched out the USD for the strongest of the major currencies (the USD dipped by -0.02% vs the EUR), but the dollar had decent gains vs the other currencies. The dollar had it's biggest gains versus the CAD (+0.86%) and the AUD (+0.76%). The USDJPY also increase by 0.59%. </p><p>Although higher today, the US dollar is ending the trading week with declines vs all the major currencies. Below are the changes vs the majors:</p><ul><li>EUR, -2.34%</li><li>GBP, -1.98%</li><li>JPY, -2.38%</li><li>CHF, -3.06%</li><li>CAD, -0.46%</li><li>AUD, -2.15%</li><li>NZD, -2.60%</li></ul><p>Lower inflation from CPI and PPI this week are giving traders hopes that the Federal Reserve will have only one more hike in 2023, despite some overtures that 2 is still the most likely scenario from some Fed officials including Fed's Daly and Waller. </p><p> Fed's Waller said that the September meeting is still "live"(most expect that the Fed would skip that meeting), but that he still sees " two more 25-basis-point hikes in the target range over the four remaining meetings this year as necessary to keep inflation moving toward our target,” </p><p>Fed's Daly said earlier this week (before inflation data) that two hikes were still likely. Yesterday, she backtracked a little saying that the comments earlier in the week were intended to keep the optionality open for an additional hike this year. </p><p>The Fed next announces its rate decision on July 26. The September meeting is on September 20 and the November meeting is on November 1. That allows for 2 more unemployment and inflation readings before the September meeting, and three more before the November meeting. Clearly, that will be enough data to see if the inflation decline has run it's course and is moving back higher, or is continuing to move lower. </p><p>This week the market was full of optimism for a Goldilocks economy with growth remaining but inflation moving lower. </p><p>In the US debt market today, yields corrected higher after falling lower earlier this week. For the day:</p><ul><li>2-year yield 4.767% +15.7 basis points</li><li>5-year yield 4.045%, +11.0 basis points</li><li>10-year yield 3.830% +7.1 basis points</li><li>30-year yield 3.925% +3.1 basis points</li></ul><p>For the trading week yields were still lower:</p><ul><li>2-year yield fell -17.8 basis points</li><li>5-year yield fell -31 basis points</li><li>10-year yield fell -23 basis points</li><li>30-year yield fell -11.7 basis points</li></ul><p>The lower yields and lower dollar – along with the Goldilocks scenario – helped to boost stocks this week:</p><ul><li>Dow industrial average added 774 points or 2.29%</li><li>S&amp;P index added 106.45 points or 2.42%</li><li>NASDAQ index added 452.98 points or 3.32%</li></ul><p>The NASDAQ gain was the largest since the week of March 27, 2023.</p><p>In Europe, the major indices were mostly lower today, but like US indices, they had strong gains for the week:</p><ul><li>German DAX, +3.22%</li><li>Frances CAC, +3.69%</li><li>UK's FTSE 100, +2.45%</li><li>Spain Ibex, +2.05%</li><li>Italy's FTSE MIB, +3.19%</li></ul><p>In the Asian Pacific market:</p><ul><li>Japan's Nikkei 225 rose 2.42%</li><li>Hong Kong's Hang Seng index increased 5.71%</li><li>China's Shanghai composite index rose 1.28%</li><li>Australia's S&amp;P/ASX index rose 3.7%</li></ul><p>European benchmark 10 year yields fell sharply:</p><ul><li>Germany, -15.9 basis points</li><li>France, -15.2 basis points</li><li>UK, -27.3 basis points</li><li>Spain -15.7 basis points</li><li>Italy -18.6 basis points</li></ul><p>Canada's 10-year yield fell by -20.7 basis points this week.</p><p>Next week, the US earning season will continue with more large financials including:</p><ul><li>Bank of America</li><li>Morgan Stanley</li><li>Charles Schwab</li><li>PNC financial</li><li>Bank of New York</li><li>Goldman Sachs</li><li>American Express</li></ul><p>There will be a number of regional banks which are thought to be more vulnerable to earnings swings announcing. Of the top 15 stocks in the KRE ETF for regional banks, 12 will be reporting representing around 25% or the index (I think I heard 60% of KRE will be announcing next week). </p><p>Other big names announcing next week include:</p><ul><li>Tesla, Netflix and IBM on Wednesday</li><li>Johnson &amp; Johnson, American Airlines, United Airlines and Travelers will announce on Thursday</li></ul><p>Looking ahead:</p><ul><li>Alphabet is scheduled on Monday, July 24</li><li>Microsoft is scheduled on Tuesday, July 25</li><li>Amazon, Meta and Boeing are scheduled on Wednesday, July 26</li><li>Bristol Myers Squibb, Intel, McDonald's and Northrop Grumman are scheduled on Thursday, July 27</li></ul><p>Below is a summary of some of the major economic releases (times are ET)</p><p>Sunday, July 16</p><ul><li>10:00 PM: China's GDP for Q2 (Forecast: 7.1%, Previous: 4.5%)</li><li>10:00 PM: China's Industrial Production YoY (Forecast: 2.5%, Previous: 3.5%)</li></ul><p>Monday, July 17</p><ul><li>8:30 AM: U.S. Empire State Manufacturing Index (Forecast: -3.5, Previous: 6.6)</li><li>9:30 PM: Australia's Monetary Policy Meeting Minutes</li></ul><p>Tuesday, July 18</p><ul><li>8:30 AM: Canada's CPI MoM (Forecast: 0.3%, Previous: 0.4%)</li><li>8:30 AM: Canada's Median CPI YoY (Forecast: 3.7%, Previous: 3.9%)</li><li>8:30 AM: Canada's Trimmed CPI YoY (Forecast: 3.6%, Previous: 3.8%)</li><li>8:30 AM: U.S. Core Retail Sales MoM (Forecast: 0.4%, Previous: 0.1%)</li><li>8:30 AM: U.S. Retail Sales MoM (Forecast: 0.5%, Previous: 0.3%)</li><li>6:45 PM: New Zealand's CPI QoQ (Forecast: 0.9%, Previous: 1.2%)</li></ul><p>Wednesday, July 19</p><ul><li>2:00 AM: UK's CPI YoY (Forecast: 8.2%, Previous: 8.7%)</li><li>9:30 PM: Australia's Employment Change (Forecast: 16.5K, Previous: 75.9K)</li><li>9:30 PM: Australia's Unemployment Rate (Forecast: 3.6%, Previous: 3.6%)</li></ul><p>Thursday, July 20</p><ul><li>8:30 AM: U.S. Unemployment Claims (Forecast: 242K, Previous: 237K)</li></ul><p>Hope you have a great weekend.</p>

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