News

Headlines:

• Bitcoin continues to print new all-time highs amid a short squeeze
• EU’s Kallas: No outcome yet in US talks on tariffs, we don’t want to retaliate
• US secretary of state Rubio: The odds are ‘high’ for a Trump-Xi meeting
• ECB’s Schnabel: The threshold for another rate cut is very high
• More from ECB’s Schnabel: Another cut would require significant inflation deviation
• ECB’s Panetta: Monetary policy approach in coming months must remain flexible, pragmatic
• Germany June wholesale price index +0.2% vs -0.3% m/m prior
• France June final CPI +1.0% vs +0.9% y/y prelim
• UK May monthly GDP -0.1% vs +0.1% m/m expected

Markets:

• CHF leads, JPY lags on the day
• European equities lower; S&P 500 futures down 0.5%
• US 10-year yields up 4.3 bps to 4.389%
• Gold up 0.7% to $3,347.42
• WTI crude up 1.0% to $67.24
• Bitcoin up 3.7% to $117,799

It was another session all about waiting on trade headlines but as we approach the end of the week, the anxiety is starting to get to markets. Trump slapped Canada with 35% tariffs and said he would be sending a letter to the EU today as well. And that led to a slump in the market mood in Asia, before carrying over to Europe after the open.

The dollar held firmer throughout, though gains have been trimmed as we look towards US trading.

EUR/USD is down just 0.1% now to 1.1693 with large option expiries at 1.1700 still in play on the day. Meanwhile, USD/JPY was holding around 147.10 earlier but is now at 146.90 levels – still up 0.4% on the day.

The pound is among the laggards after a softer May monthly GDP report in the UK. GBP/USD is down 0.4% to 1.3515 currently. Elsewhere, USD/CAD is up 0.2% to 1.3685 but off earlier highs of 1.3730 after the Trump headline.

In the equities space, European indices look set for a stuttering end to the week. That said, it’s still been a good week overall for European stocks but we’ll have to see what comes of Trump’s letter to the EU. Adding to that, is there going to be a makeshift deal as negotiations drag on beyond 1 August?

As for US futures, the mood music is dulled as the drop at the open looks set to unravel the bounce in the past two days. It’s going to be a nervy end to the week if Trump continues with his trade tirade.

In other markets, Bitcoin continues to soar as it runs to a record high of $118,000 during the session. Ethereum also briefly jumped above $3,000 as cryptocurrencies are running hot. It’s the summer of crypto, and also collectibles it would seem.

There won’t be too much on the agenda to end the week, with the Canadian jobs report the main thing left. As such, all eyes will stay on trade headlines before the weekend comes. Have a good weekend, everyone!

This article was written by Justin Low at www.forexlive.com.