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Market Brief, North America

It’s quiet. Too quiet.

Currency markets are broadly lacking in conviction this morning, with the British pound the only significant mover among the majors, and the dollar inching lower against its rivals in generally-directionless trading.  Equity markets and commodity prices are unimpressed after the People’s Bank of China and the National Financial Regulatory Administration told lenders to roll over outstanding loans to property developers – a step that might prevent a string of defaults, but which won’t do much to improve household confidence. After what might have been the biggest property bubble in history, many cities are overbuilt, local governments and millions of households are carrying...

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Price action slows ahead of US inflation and Canadian policy decision

Markets seem to be tiptoeing into a data-light week with a sense of trepidation.Equity futures are weaker, Treasury yields are ticking lower, and benchmark dollar indices are pushing higher ahead of the opening bell, suggesting that risk appetites remain relatively constrained after Friday’s big moves. The euro, pound, and Canadian dollar are all sitting in defensive positions, with technical indicators pointing to rangebound price action ahead. Inflation flat-lined in China last month, and a sharp decline in producer prices suggested that the world’s biggest manufacturer is beginning to export deflation. Headline consumer prices were unchanged in June relative to a year earlier, and...

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US yields remain aloft ahead of non-farm payrolls report

The dollar is rangebound and risk-sensitive currencies are licking their wounds after suffering steep losses in yesterday’s session as strong economic data sent US yields rocketing to a 16-year high. The ADP Research Institute kicked things off by saying US companies added 497,000 jobs in June, almost twice the consensus forecast. The Bureau of Labor Statistics followed up with data showing a modest increase in the number of initial claims for unemployment benefits, but countered that with a reduction in continuing claims. A later report said job openings fell to 9.82 million at the end of May, down from an upwardly...

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Unsurprising Fed minutes push yields higher

Odds on another rate hike at the Federal Reserve’s July meeting were left slightly higher yesterday after a record of June’s discussion showed officials were modestly more hawkish than expected. Staff forecasts pointed to a deceleration in growth and price pressures through the latter half of the year, and there was considerable uncertainty about where the cumulative effects of previous tightening efforts would appear, but “almost all” agreed that rates would need to climb further this year – and some favoured moving more quickly because “momentum in economic activity had been stronger than earlier anticipated and there were few clear signs that...

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Markets retreat as fireworks fade

Financial markets are suffering a modest post-July 4 hangover, with the big risk haven currencies – the dollar, euro, and yen – outperforming their commodity-linked brethren ahead of the North American open.  Risk appetite is broadly weaker after China’s Caixin services sector purchasing manager index fell by more than expected in May, providing more evidence of a softening in consumer sentiment in the world’s second-largest national economy. The index dropped to 53.9 from 57.1 in April, missing forecasts that were set above the 56 threshold, and aligning with similar results from the official services and manufacturing surveys last week. The yuan...

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