New York Session

The NY session saw a perfect storm develop against the US dollar as risk taking and lower US yields weighed on the buck. Better earnings in the retail space helped buoy shares and the S&P climbed comfortably back above the 900 mark, adding a nice 2.1% on the day. Commodities were better bid and the CRB index rallied more than 1.4%. Oil was a main driver of the gains as crude jumped nearly $2 to back above the $70/bbl mark. Gold, for its part, added $8 on the day towards 939/940 as the precious metal continues to get bought ahead of 900 support.


If this wasn’t enough, yields in the US also pushed lower on the back of another excellent Treasury auction. The 7-year saw a 2.82 bid/cover with more than 67% of the offer going to indirect bidders (foreign central banks). The results were well above recent trends and suggest US funding concerns are way overdone at this point. Bonds were bought hand-over-fist and the 10-year yield dropped -15 basis points to 3.54%. This impacts the US rate differential (making US assets relatively less attractive from a rate of return standpoint) and could weigh on the dollar if sustained.


EUR/USD was ultimately higher on the back of the dollar-negative developments and the pair popped from a session low 1.3989 to a high of roughly 1.4010/15. The air above 1.40 remains thin and we would expect good resistance into that area. GBP/USD recovered from a collapse into 1.6235 to sit near 1.6370 at the NY close.


The only economic data of note was US initial jobless claims and they jumped to a higher than anticipated 627K from 612K the prior week. This was the biggest change in claims in about one month and puts a damper on expectations for a speedy job market recovery.


Upcoming Economic Data Releases (Asia Session) prior expected

6/25 22:45
GMT
NZ
GDP
QoQ 1Q
-0.90% -0.70%

6/25
23:01
GMT
UK Bank of England Releases
Financial Stability Report
25-Jun

6/25 23:30
GMT
JN
Tokyo CPI YoY
JUN
-0.80% -1.30%

6/25 23:30
GMT
JN
Tokyo CPI Ex-Fresh Food YoY
JUN
-0.70% -1.00%

6/25
23:50
GMT
JN
All Industry Activity Index (MoM)
APR
-2.40% 2.30%