Headlines:
- Hundred to the table
- USD/JPY pushes higher, 140.00 in the crosshairs
- Dollar gains further to start European morning trade
- Equities pressured lower on the session
- Italian bonds slump on political divide
- Germany June wholesale price index +0.1% vs +1.0% m/m prior
- Switzerland June producer and import prices +0.3% vs +0.9% m/m prior
Markets:
- USD leads, CAD lags on the day
- European equities lower; S&P 500 futures down 1.4%
- US 10-year yields up 1.7 bps to 2.922%
- Gold down 1.3% to $1,713.52
- WTI crude down 1.9% to $94.46
- Bitcoin up 0.4% to $19,736
As markets are trying to adapt to frontloading of rate hikes by major central banks, the dollar continues to run rampant across the board with equities slumping in European trading today.
USD/JPY pushed up to 138.30 in Asia before extending gains significantly to 139.40 on the session. Price has pulled back a little but the gains for the pair are still over 1% on the day, with buyers looking towards 140.00 next.
Elsewhere, the dollar is running hot with EUR/USD pressured down by 0.6% to near parity. We're at the lows now around 1.0005 while GBP/USD is down 0.6% as well to 1.1820.
Commodity currencies weren't spared with USD/CAD surging higher in a breakout to fresh highs since November 2020, jumping above 1.3100. Meanwhile, AUD/USD saw early gains evaporate with a drop from 0.6780 to 0.6715 on the session.
The moves come amid a more dour risk backdrop with equities slumping hard with US futures set for a rather poor start to the day. JP Morgan's earnings warning only adds to the doom and gloom.
Central banks are looking to frontload rate hikes before the recession comes along and that is the name of the game after yesterday's US CPI data. 100 bps for the Fed seems a given now in two weeks' time. The question though is, how will markets feel once we look past all of this and towards slowing growth and rate cuts?
