JPY

Price action is turning choppy in financial markets this morning as liquidity begins to evaporate ahead of tomorrow’s July 4 holiday. Equity futures are flat ahead of a shortened trading session, fixed-income markets are seeing modest safe-haven flows, and commodities are range-bound as thinly-manned trading desks take risk off the table before Friday’s non-farm payrolls report. The dollar and Treasury yields retraced some of their post-presidential debate gains yesterday after Federal Reserve chair Jerome Powell said the US economy is showing “signs of resuming its disinflationary trend,” helping bolster the likelihood of a rate cut in September. Speaking at a...

It’s not July 4th yet, but fireworks are going off in the financial markets. The dollar has risen sharply in line with a surge in Treasury yields over the last three sessions after a dismal performance from President Biden in Thursday’s televised debate triggered a dramatic reappraisal in the odds on a Republican sweep. With former president Trump cruising toward a second term and his party seen gaining control over both houses of Congress, markets think increased tariffs, reduced immigration, and lower taxes will lead to higher inflation, larger deficits, and more Treasury issuance. Breakeven inflation rates – a measure...