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• High Yield 3.891%
• WI level at the time of the auction 3.887%
• Bid to cover 2.51X vs 6-month average 2.61X
• Tail: 0.4 basis points versus six month average of 0.5 bps
• Directs (domestic buyers):29.4% vs six month average of 15.1%
• Indirects (international buyers) : 54.1% vs six month average of 66.6%
• Dealers: 16.5% vs. six-month average of 18.2%

Auction Grade: C-

The tail was near the average but still above the WI level.. The Bid to cover was below average. The Domestic buyers were greater than the average but the international buyers were lower. The Dealers were less than average.

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

More Trump:

• We will be announcing semi conductor tariffs soon.
• Believer copper tariffs will be 50%

On Israel:

• Will meet with Israel’s p.m. Netanyahu Tuesday evening
• Will talk about Gaza
• He wants to get it solved

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

The US treasury will auction off $58 billion of 3-year notes at the top of the hour. The auction results will be compared to the six-month averages of the major components. Those averages show:

• Bid to cover 2.61X
• Tail: 0.5 bps
• Directs (domestic buyers): 18.2%
• Indirects (international buyers) 66.6% Dealers 15.1%

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

• We will step up contractors to make military equipment
• Not happy with Putin
• Looking at Russian sanctions
• Chair Powell should resign immediately.
• Should get someone in there to lower rates immediately.
• Everyone pays on August 1
• If they don’t want to pay, they don’t sell in the US
• The deals are mostly my deal to them.
• We are picking a number that is low and fair.
• BRICs are getting 10% pretty soon.
• The US dollar is king. We will look to keep it that way
• The EU is treating us very nicely
• Probably two days off from sending EU letter. A letter is a deal.
• Prices are down in this country.
• Gasoline prices are lower.
• I have a great relationship with Xi

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

Morgan Stanley reiterates its USD bearish base case, but highlights that a supply-driven surge in oil prices is an important upside risk to the Dollar, potentially triggering a short squeeze in what remains a consensus short USD market.

Key Points:

• Supply-Side Oil Shock = Short Squeeze Risk:• A geopolitical supply shock that pushes oil prices sharply higher could lift the USD by ~2% or more, given crowded USD short positioning.• Near-term, this could limit investors’ appetite to add USD shorts or increase exposure to oil-sensitive FX pairs.

• Parallels with March 2022:• The market is increasingly trading FX based on terms-of-trade dynamics, similar to the reaction after the Russia-Ukraine war began in March 2022.• Historically, the DXY peaks and then weakens quickly after geopolitical escalations, implying that any USD rally driven by oil could be short-lived.

• Positive USD-Equity Correlation:• The strong correlation between USD and US equities may also cap any significant, sustained USD strength.

• Medium-Term Bearish USD Fundamentals Remain:• US rate convergence, hedging flows, and weaker relative growth still point to a weaker USD in the medium term.• MS sees a geopolitical-driven USD squeeze as an opportunity for USD bears to re-enter at better levels.

Conclusion:

Morgan Stanley argues that while higher oil prices are a real short-term risk to the bearish USD view, any USD strength on the back of an oil-driven short squeeze should be seen as an opportunity to fade and re-establish short positions, as fundamentals continue to favour a weaker dollar into 2025.

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

The EURUSD has moved lower, trading to a new low for the new trading week and entering back into a key swing area that was defined back in April to November 2021.

Looking at the hourly chart below, the price moved above and based against that area at the end of June before moving to the high for the year (and going back to 2021) last week. The area was tested and bounced to the 100 hour MA today (blue line). Sellers leaned against the level and have pushed lower in the early US session, as a wave of USD buying has pushed the pair lower and back in the swing area.

A move below 1.1663 would open the door for more selling toward a swing area between 1.1614 and 1.1629.

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