Dollar Rebounds to Start Week

Markets are in a holding pattern for the moment, with few top-tier data releases this week to serve as a catalyst for price action. For today, the most notable events will be the release of the Institute for Supply Management’s (ISM) Services Index for the month of June, which is expected to show sector expansion, albeit at a slower pace than last month, and a scheduled talk from Fed Governor Christopher Waller. Looking ahead, the focus is on Wednesday’s release of the FOMC Meeting Minutes for June, where the committee turned hawkish, with Traders looking to glean some kind of insight after Fed Chair Kevin Warsh softened his tone on inflation last week.

What to Watch This Week…

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The complete Economic Calendar can be found here.

JPY

The Japanese Yen is the G10’s worst performer this morning. Japanese Government Bond 10- and 20-year yields have risen to some of their highest in nearly thirty years after Traders lined up to sell notes back to the Bank of Japan in its bond-buying operation this morning. This has only served to amplify concerns regarding fiscal stress ahead of tomorrow’s 30-year JGB auction. Additionally, intervention risk is fading, with Japanese authorities seemingly content to sit on the sidelines as their window for surprise action appears to be closing.

NZD

The New Zealand Dollar is down against the Buck this morning after the New Zealand Institute of Economic Research published the Reserve Bank of New Zealand Shadow Board, which recommended that the central bank keeps interest rates on hold at 2.25% at their meeting later this week. Members appear to be split, with some advocating for a hike, citing inflation concerns. This has served to keep the policy outlook relatively uncertain, and that is weighing on the Kiwi. Falling commodity prices are serving as a further headwind for New Zealand’s export-driven economy.