Forex news for North American trade on July 27, 2021:
- US July Conference Board consumer confidence 129.1 vs 123.9 exp
- US June durable goods orders +0.8% vs +2.1% expected
- Richmond Fed manufacturing index for July 27 versus 20 estimate
- US May Case-Shiller May 20-city house price index +17.0% y/y vs 16.4% exp
- IMF leaves 2021 global GDP forecast at +6.0% with stronger US growth but weaker EM
- CDC recommends all kids in school wear masks
- U.S. Treasury sells $61 billion a 5 year notes at a high yield of 0.710%
- WSJ. China appears to be building new silos for nuclear missiles
- Atlanta Fed GDPNow Q2 forecast 7.4% vs 7.6% prior
- Schumer: Senators should be prepared to work through weekend on infrastructure
Markets:
- Gold up $3 to $1800
- US 10-year yields down 3.8 bps to 1.2378%
- WTI crude oil down 14 cents to $71.20
- S&P 500 down 20 points to 4401
- JPY leads, NZD lags
The pain in Chinese equity markets (and increasingly the yuan) are grabbing more attention and weighed on sentiment early. US equities tumbled at midday but regained more than half the declines into the close.
The dollar was sold throughout the day and particularly into the London fix, where it fell +50 pips, including a particularly hard fall against the pound.
Economic data wasn't a driving factor as the mixed bag of data offered little direction.
The driving factor is tomorrow's Fed decision and a growing belief we will get some dovish hints, or at least a few nods to delta risks. In addition, the market continues to come around to the idea that inflation will be transitory, though that debate is certainly live.
The commodity currencies bounced around as the combination of risk aversion and USD weakness fought it out. There were few winners in that dynamic and some heavy chop. Ultimately, the kiwi and CAD lost some decent ground but the vast majority of the damage was done in Asian trade.
