- On/Off Iran deal keeps traders close to home
- Traders looking ahead to Friday’s US NFP numbers
- USD trading mixed in early NY.
USDCAD open: 1.4036, Range (since Fri.) 1.3996-1.4066, Fri. close 1.4022, Mon. close 1.4047, WTI 77.92, Gold 4,078.84
The Canadian drifted lower Monday and remained directionless today because of contradictory reports on the Iran and US ceasefire talks.
Trump tells everyone who will listen that a resolution to the hostilities in at hand, while Iran denies it and continues to wage war on its neighbors.
WTI traded in a 77.17-82.32 range with the bottom seen in NY trading. Prices continue to react to every headline and tweet and the current level suggest traders are still hopeful for another ceasefire.
Canada June Trade data is on tap and Canada’s trade surplus is expected to decline to $3.0 billion from $4.24 b in May.
Today’s US data includes Trade Balance data (previous -$101.5 billion), JOLTS Job Openings (forecast 7.4 million, down from 7.594 million) and Factory Orders.
Tariff drama never ceases. Half the US states have filed suit in the US Court of International Trade in Manhattan, accusing Trump and administration officials of unlawfully leaning on Section 301 of the Trade Act of 1974 to resurrect tariffs that courts had already struck down or that had simply expired.
US equities rallied hard Monday, led by the Nasdaq, as falling yields and Trump's decision to stand down from a broader Iran strike lifted risk appetite. FX traders, by contrast, stayed close to home, partly because this is US employment week with Friday's payrolls looming large.
Analysts will spend the next few days combing the inflation components buried in this week's jobs data rather than chasing headlines.
Asian markets were mixed and failed to sustain Wall Street's momentum. Australia's ASX 200 rallied 1.40%, Japan's Topix finished flat and Hong Kong's Hang Seng slipped 0.60%.
European stocks are higher as of 7:45 am. Germany's DAX is up 0.82%, the UK's FTSE 100 has added 0.49% and France's CAC 40 has gained 0.34%. S&P 500 futures are up 0.32%, the 10-year Treasury yield sits at 4.659%, and the DXY is 99.93.
EURUSD dropped in a 1.1501-1.1562 range peaking on Monday's stronger than expected US ISM Manufacturing PMI, which rose to 55.6 versus a 54 forecast and 53.3 previous. The data reinforces the resilience narrative and hints the economy could absorb a rate hike without much trouble. Today, traders are parked on the sidelines awaiting Trump's next move against Iran.
GBPUSD traded negatively in a 1.3417-1.3508 band since Friday, weighed down by the same robust ISM print that pressured the euro, even as its own S&P Manufacturing PMI came in a tad better than expected.
USDJPY chopped in a 155.23-157.96 from Friday's close. The lingering drag from the joint Japanese Finance Ministry and US Treasury intervention to prop up the yen weighs on the currency pair but it changes nothing about the JGB-Treasury yield gap, which fueled the USDJPY rally in the first place. Japan's manufacturing PMI ticked lower Monday to 54.5 from 54.7.
AUDUSD ranged 0.6983-0.7051 since Friday's close in a session that featured a Monday holiday for Australian traders. They came back buying, and have since clawed back a healthy chunk of the losses.
