The bond market break may just have to wait for a bit more. That’s the verdict as we look towards European trading today and the dollar is taking some off the top of its recent gains, but still sitting in a good position overall.
EUR/USD is trading at 1.0880, little changed on the day, but still below its 100-day moving average of 1.0930. Meanwhile, USD/JPY despite its pullback to 145.40 levels now is still keeping above the 145.00 mark and that is crucial for buyers to keep the upside momentum.
That said, I’d be wary of the yen shorts more so as we are in Japan intervention territory and perhaps there are some stretched positioning when it comes to that.
Elsewhere, equities suffered yet another beating yesterday and once again the selling came in Wall Street. It has been a recurring theme all week. So, even with US futures keeping little changed now, it isn’t indicative of anything I would say. It is still early in the day.
Coming up in Europe, we’ll have UK retail sales data and that should highlight further pain in the economy in terms of consumption activity. That will continue to give the BOE a headache as they still need to tighten policy to counter inflation pressures. There will also be the Eurozone final CPI figures for July but that shouldn’t offer anything new.
0600 GMT – UK July retail sales data
0900 GMT – Eurozone July final CPI figures
That’s all for the session ahead. I wish you all the best of days to come and good luck with your trading! Stay safe out there.
