News

There is a fairly pervasive view at the moment that the bond market is ranging and that we have to wait for a change in economic data to break the paradigm. Given that, it’s not a big surprise that a 5-8 bps drop in Treasury yields today hasn’t moved the dollar but it’s still a notable sign.

The US dollar had its worst H1 in 50 years but has rebounded modestly so far to start the second half. Some of that was underpinned by a steady climb in yields as 10s rose to 4.42% from 4.22% but that’s reversed 7.7 bps today and the dollar is basically flat. I wouldn’t draw any big conclusions about a further dollar bounce based on one day of price action (with not much else going on in markets) but it’s something to keep an eye on.

This article was written by Adam Button at www.forexlive.com.

Remember 10 years ago when Prime Day was one day? It extended to two days in 2021 but starting this year, the ‘day’ is now 96-hours long — four full days.

The headline crossing at the moment is that sales on Day 1 were down 41% compared to a year ago. That’s not a good look for the consumer at first blush but last year it was still a two-day event, so I doubt it’s an apples-to-apples comparison.

Shares of Amazon fell to $220 from $222 on the headline but have bounced back with the market likely concluding that the longer timeline will balance the sales. I’d trust Amazon on this one, they’re the all-time champions of internet marketing and they likely have a pretty good strategy on the slower, longer drip of sales in a four-day event.

This article was written by Adam Button at www.forexlive.com.

• Most participants saws some reduction in Fed funds rate this year
• ‘Some’ participants said the most-likely appropriate path would involve no rate cuts in 2025
• Those participants cited recent elevated inflation readings, elevated inflation expectations and economic resilience
• Several participants said Fed funds might not be far above neutral
• Fed staff saw higher real GDP growth for 2025 than in previous forecast, also saw lower inflation

There is no mystery who the ‘couple’ is — Waller and Bowman. The news here is that there is no one else joining them and that they were outnumber by those who don’t see any cuts at all. That doesn’t mean the market is wrong to price in 63 bps in easing this year because there is a tendency for officials to be overly-hawkish until the bad news hits; but we may be overindexing for Waller/Bowman.

This article was written by Adam Button at www.forexlive.com.

Shares of Google-parent Alphabet just took a $4 dive on Reuters sources report saying that OpenAI plans to release an AI web browser.

The browser would presumably take on Chrome, which is a key part of the Google moat. It’s also a massive source of Google’s data trove for advertising, which is almost three-quarters of its revenue.

As for the rest of the web, it’s a further troubling sign. The browser from OpenAI wouldn’t take you to websites but would scrape the data and leave you in a chat-like interface. That type of model will in time degrade the information on the internet and undermine many business models.

There is some talk this type of browser would enable AI agents. At the start of 2025, it was hailed as ‘the year of AI agents’ but that hasn’t panned out at all.

This article was written by Adam Button at www.forexlive.com.

• We haven’t had too many complaints on tariffs
• Will have more tariff numbers coming out today
• Not happy about what’s going on in Ukraine, will look at sending another Patriot missile system
• There’s a very good chance of a settlement this week in Gaza
• We should have the lowest interest rates
• Tariff formula based on common sense

Trump is slowly rolling out the tariff drama. Brazil has been combative on tariffs before so that could be an interesting one. He’s meeting African leaders today.

This article was written by Adam Button at www.forexlive.com.