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The US Dollar Index kept advancing and rallied for a fourth week in a row. It reached its highest point for the week, close to the 103.00 level, since June. The stock markets didn’t shift much as caution predominated. While continuing its seven-week rising trend, crude oil briefly retraced after reaching its highest point since November. The price of WTI crude settled over $82 per barrel.
The US treasury bond yields are rising and benefiting from this by more than 1% per day. On the Japanese side, the Yen is still trading weakly as investors continue to bet on the Bank of Japan’s (BoJ) expected dovish stance.
The 10-year yield exceeded 4.15% as US Treasury yields increased. Silver fell by 4.2% to roughly $22.60 per ounce while Gold lost $30 and concluded close to $1,910. The USD/JPY sharply surged and closed at its highest weekly level since November at 145.00. Due to different monetary policies and higher government bond yields, the Japanese Yen underperformed. On Tuesday, Japan will publish data on Q2 economic growth; on Thursday, trade data and machinery orders for June; and on Friday, the National CPI.
Although EUR/USD had a bad week, it found support above the 200-week SMA at about 1.0940. On Monday, a holiday will be observed in a number of European nations. Germany’s annual Wholesale Price Index is predicted to moderate in July, going from -2.9% to -2.6%. On Tuesday, the ZEW Survey is expected to be made public. The final CPI, employment change, and Q2 growth data will all be released by the Eurozone on Wednesday and Friday, respectively.
Economic Data
The US Producer Price Index (PPI) data and University of Michigan’s Sentiment Index have been significant market drivers prior to the weekend.
Better than anticipated, the University of Michigan’s Sentiment Index increased to 71.2, while expectations for consumer inflation over the next five years decreased to 2.9%. The reading is considered optimistic, and PPI data showed that the headline figure increased to 2.4% YoY in July, which was a little higher than anticipated.
The US inflation picture is mixed overall as a result of this and the US’s announcement this week that the headline and core Consumer Price Index (CPI) both declined in the same month.
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